Host Mexico, the WTO and Free Trade: Unrealized economic promises ... and real pain for farmers

Mexico has been a willing guinea pig going cold turkey into free trade, but after 18 years as a free-trade laboratory, country leaders acknowledge the devastating impact open borders have had on its farm economy.

 

Free trade binds: Agreements with the US have benefited only a very small part of the Mexican farm population the rest are left fighting a losing battle with subsidized corn.
In 1986, Mexico began opening its borders with its entry into GATT – the General Agreement on Tariffs and Trade. (GATT was an informal, interim structure for guiding international trade that has been replaced by the World Trade Organization.) As a participant in the North American Free Trade Agreement (NAFTA) starting in 1994, Mexico was promised all the development benefits that further free trade transformations could offer.

As it hosts the WTO negotiations in 2003, Mexico is experiencing the hardships of free trade. Among the hardest-hit sector has been agriculture.
• Corn imports have nearly tripled since NAFTA, and the price has dropped 64 percent since 1985.
• Genetically modified corn imports have contaminated local varieties, considered the global center of genetic diversity for corn.
• Soybeans, wheat, poultry and beef imports have risen more than 500 percent.
• The Mexican countryside has lost about 1.7 million jobs since NAFTA, forcing many to seek work across the border in the U.S.
• Owners on the 8 percent of Mexican land devoted to agro-export have benefited from free trade policies, while the 3 million producers of basic grains and oilseeds on 70 percent of Mexican farmland have been devastated by low-cost imports.

At the same time, many industrial facilities lured by NAFTA are already leaving Mexico for other developing countries, particularly China. The U.S. is negotiating bilateral agreements with neighboring countries, as well as the Free Trade Area of the Americas (FTAA), which will negate any special relations that Mexico had with the U.S. under NAFTA.

Free Trade vs. National Development

The debate in developing countries is not, at root, a debate between free trade and protectionism. It is a debate between the imposition of free trade rules at the cost of national development and well-being.

In the complex and difficult context of a globalization that shows clear tendencies toward increasing inequity, and concentration and polarization of wealth, developing nations need to respond with policies that assure each citizen a basic standard of living.

The WTO Agreement on Agriculture, like NAFTA, binds national policymaking in a straitjacket just when developing countries must respond to new and dangerous challenges. At the same time, it exacerbates threats to food sovereignty, and eliminates important strategies for survival in the countryside that not only guarantee livelihoods but also support cultural, agricultural, and biological biodiversity.

--Laura Carlson, Interhemispheric Resource Center

When NAFTA came into full effect earlier this year, farmers blocked roads and herded farm animals into government offices to protest free trade. Millions of farmers have been put out of business, particularly those producing traditional Mexican crops of corn and beans.

Recently, Mexico’s President Fox signed an accord with farm leaders pledging to keep tariff protection for several grain crops — an acknowledgement of the damaging effect free trade has had on Mexico's farm economy. Even this accord was very contentious and opposed by several farm groups for not doing enough to protect Mexico's farmers.

Without new guidelines that balance trade access with profound social and environmental impacts, Mexico’s small farmers will be the collective sacrificial lamb for the nation’s costly free-trade participation.

For more information about the Mexican-US trade relationship read these recent New Farm articles:
U.S. corn subsidies said to damage Mexico
US accused of dumping GM maize in Mexico

For Mexico, NAFTA does not work