NAFTA & Its Effects on Mexico’s Agriculture

In 1994 the United States of America, Mexico, and Canada entered into a trilateral agreement. This agreement was NAFTA, the North American Free Trade Agreement. This created the world’s largest trading block. One of the largest impacts it had was on the agriculture business. NAFTA was supposed to increase foreign investments and jobs for Mexico in exchange for lower production costs for the United States and Canada. In addition, NAFTA promised tax free and tariff free exports for the United States and Canada for staple crops and meat in exchange for affordable, year round imports from Mexico, such as fruits and vegetables. Although the agreement promised an “even playing field” among the North American countries, that was not in fact the case. Mexico’s agricultural business suffered greatly, specifically in the production and sale of corn, the meat industry, and the overall health of the Mexican people.

The Mexican “corn crisis” swept across the country’s agricultural business. According to Oxfam International’s paper, Dumping Without Borders, “Real prices for Mexican corn have fallen more than 70 per cent since 1994”. This is a direct result of NAFTA. The United States is the largest exporter of corn in the world. The United States ability to export such a high rate of corn at artificial prices has ruined the main source of income for tens if not hundreds of thousands of corn farmers.

A specific program Dumping Without Borders talks about one program that came out of NAFTA was the “kilo-for-kilo” program. This program run by Monsanto urged Mexican farmers to trade a kilo of their native seeds for a kilo of hybrid seeds. These hybrid seeds were less productive after a year unlike the native seeds, and they needed more fertilizer and chemicals. This led to many health issues in these communities because farmers lacked basic proper knowledge and tools to use these chemicals. In addition, it was more expensive to buy more seeds, fertilizers and chemicals every year. This became a huge issue for Mexican farmers and resulted in many leaving their farms behind and migrating north to find other means of work or growing other crops (cannabis became a popular crop for Mexican farmers to turn to).

One of the biggest hits to the Mexican corn industry was the disastrous effects it had on small farmers. According to Anjali Browning, author of Corn, Tomatoes, and a Dead Dog: Mexican Agricultural Restructuring after NAFTA and Rural Responses to Declining Maize Production in Oaxaca, Mexico, the small town of Guelavia that once flourished in the production of corn is now only a small portion. Browning interviewed local farmer Don Constantino who explained that Guelavian farmers are, “unable to compete with cheaper, processed corn coming from commercial growers that is transported to the regional markets.” That coupled with the lack of rain and shifting labor, and “changes in local preparation and consumption of traditional corn-based products” has led to Geulavias’ dwindling corn market.

Browning goes on to explain that because the NAFTA agreement was set up so that Mexico would focus on horticulture crops, it put Mexican farmers at a great disadvantage. NAFTA has driven farmers to have to grow these crops in drought ridden areas. Browning says this creates issues with local resource management because in order to make up for the low prices of the crops they have to grow more. This results in, “demanding even more water resources and further deflating prices because there are virtually no other alternatives”. This made it incredibly hard to farm at all and now the few farmers that still grow crops have huge plots of land to farm but are receiving only a fraction of the revenue that their crops used to yield. There is now a cycle of more and more crops being farmed for cheaper and cheaper in order for farmers to survive.

When looking at who isn’t suffering from the negotiations of NAFTA, but are in fact thriving one person stands out; Roberto González Barrera. Alyshia Galvez, author of Eating NAFTA: trade, food policies, and the destruction of Mexico, talks about a man referred to as the “Tortilla King.” Roberto González Barrera, a billionaire who controlled 70% of the tortillas and cornmeal consumed in Mexico back in 2007. Barreras’ success has been called into question, many saying it’s due to “nepotistic favoritism”. Barrera has close ties to former president of Mexico, Carlos Salinas. According to the article A Discredited President Returns to Mexico, by Sam Dillon, a journalist for The New York Times, former President Salinas was exiled in 1995. Salinas was president when NAFTA was created. Many have called into question whether or not some aspects of NAFTA should be looked into and changed due to possible motives he may have had when drafting Mexico’s part of the agreement.

Laura Carlsen, political analyst and director of the Americas Program of the Center for International Policy writes in an article titled, Armoring NAFTA: Battleground for Mexico’s Future. This article talks about how NAFTA pressured Mexico politically to enter into the international sphere which had devastating effects on Mexico’s national sphere. Carlsen then went on to explain how NAFTAS neoliberalism fundamentals pushed for Mexico to have, “an open market; an export-oriented economy; privileges for transnational corporations; withdrawal of the state from social programs to promote development; international labor competition and downward pressure on wages and conditions; and the commoditization of natural resources.” The way NAFTA set up a dependance of Mexico, a developing country, and the United States, a superpower, was bound to create many issues.

Although there are different numbers and statistics out there one statistic that David Bacon, author of the article, NAFTA, the Cross-Border Disaster, and journalist for The American Prospect, mentions is one on the increase in poverty in rural areas. Much like the United States, Mexico’s rural areas are typically farmland and ranchers. Bacon states that the World Bank reported that poverty in rural Mexico went from 35 percent in 1992–1994 to 55 percent in 1996–1998 after NAFTA was put into place. And that by 2010, “ 53 million Mexicans were living in poverty, about 20 percent in extreme poverty, almost all in rural areas.” These statistics are shocking. NAFTA had a huge impact on the impoverishment of millions of rural Mexicans. These farmers know no other way of life and have few to no other opportunities. According to a journal titled, “NAFTA’s Legacy for Mexico: Economic Displacement, Lower Wages for Most, Increased Migration from the Global Trade Watch, the income of farmers dropped by two thirds from 1993 to 2017 after NAFTA was put into place. This displacement and poverty is a huge factor in what drove millions of Mexicans north to the United States both legally and illegally in search of work.

One of the biggest issues facing American politics right now is illegal immigration. President Donald Trump’s call to build a wall is constantly on the news. When NAFTA was drafted the United States meat industry turned to cheap labor. This labor was available through both illegal and legal Mexican immigrants. In 2006 in Greeley Colorado, a town near Fort collins, the Swift & Co. meat packing plant was raided by ICE. According to Rebecca Boyle, a writer for the Greeley Tribune, ICE found more than 400 identities were stolen by workers at the plant and more than 1300 were accused of immigration violations. Jerry Kammer, a author of The 2006 Swift Raids: Assessing the Impact of Immigration Enforcement Actions at Six Facilities states that

“We estimate that 23 percent of Swift’s production workers were illegal immigrants.”

Kammer points out that at one point and time meat packing jobs were paid very well and were protected under heavy unionization. Although the meat packing industry was changing before NAFTA, the influx of both legal and illegal immigration north after NAFTA increased. David Bacon, also mentions in his article that, “In 1990 4.5 million Mexican migrants were living in the U.S. By 2008 the number reached 12.67 million — roughly 9 percent of Mexico’s total population. Approximately 5.7 million of these immigrants were able to get some kind of visa, but another seven million couldn’t.” The 4.3 illegal immigrants who came to America are easy targets for big companies to take advantage of. They can’t unionize or complain about wages, work conditions, or treatment or they will lose their job or get reported for illegal immigration. Krammer also explains that because of the high turnover rate in these meat packing plants that the need for cheap labor never ends. This creates a cycle of waves of immigrants, both legal and legal, migrating to rural towns for work. In rural towns such as Greeley and Fort Morgan Colorado, the big meat packing plant corporations have been questioned and looked at many times for knowingly encouraging illegal immigration to their towns for cheap labor.

The import of American meat to Mexico has also increased a lot. Frank Kyekyeku Nti, who is head of the Department of Agricultural Economics, Kansas State University wrote a journal titled, NAFTA AT 21: STRUCTURAL CHANGE IN MEXICAN’S DEMAND FOR U.S. MEAT AND MEAT PRODUCTS. Nti talks about how many experts believe that NAFTA both directly and indirectly have a part in, “the changing Mexican demand towards U.S. meat and meat products, and higher import flow from the United States.” According to Nti this influx of imported American meat to Mexico is because of NAFTA and has caused economic growth in Mexico. Nti directly accredits the lift on trade restrictions as part of Mexico’s economic expansion. Nti says incomes rose and Mexicans were more inclined to buy more expensive and better quality meat from the United States.

Mexicans buying better quality meat is obviously a good thing. Yet, how has this affected the Mexican meat industry and it’s farmers? In an NPR report by Kristina Johnson and Samuel Fromartz titled, NAFTA’s ‘Broken Promises’: These Farmers Say They Got The Raw End Of Trade Deal, Johnson and Fromartz state that the World Bank reports that two million Mexican farmers have lost their land since NAFTA was put into place. This is because the Mexican meat market has, “shifted to large-scale produce operations in the north, while Mexican livestock production has industrialized as multinational companies like Tyson, Cargill and Pilgrim’s Pride have opened up operations.” Because of NAFTA and the trade restrictions lifted these large scale American companies were allowed to completely take over the meat market. This essentially displaced two million Mexican farmers and they had no way to prepare or compete with these companies. They also have no way to fight this.

Johnson and Fromatz also make a very interesting point regarding President Trump. They say that when President Trump complains or fires a shot at NAFTA, he is, “ignoring the larger issue of consolidation in agriculture and trade.” They then go on to continue to say that when President Trump says “NAFTA” he really means “Mexico”. And that the bigger problem isn’t Mexico, but the monopolies these major companies have on the agricultural market. These monopolies are essentially what drove millions of Mexican farmers out of work, which then led to made immigration to the United States. These major companies were then able to take advantage of the influx of Mexican immigrants by hiring both legal and illegal immigrants, paying them minimum wage, and allowing them to work in horrible conditions without fear of being unionized.

Another issue not often thought of as a result of NAFTA is obesity. When NAFTA was put into place this opened up the trade of meat between Mexico and the United States substantially. In return families in Mexico started to consume larger amounts of people in their daily diets. According to a journal titled, “Exporting obesity: US farm and trade policy and the transformation of the Mexican consumer food environment” by Sarah E. Clark, Corinna Hawkes, Sophia M. E. Murphy, Karen A. Hansen-Kuhn & David Wallinga, Mexico’s obesity issue is a direct result of imports from the United States after NAFTA. According to Clark, Hawkes, Murphy, Kuhn, and Wallinga, the influx of food such as corn, soybeans, sugar, snack foods, and meat products into the Mexican market and into the homes of the Mexican people has increased Mexico’s obesity. In addition, this has restructured Mexico’s food system to look more like, “the industrialized food system of the United States.” It’s common knowledge that the United States has a problem with obesity.

According to a journal titled, “Obesity in America: A Growing Concern” by Dr. J-Michael Gonzalez-Campoy, neary 35% of Americans are obese. In another article titled, “Maps of Diagnosed Diabetes and Obesity in 1994, 2000, and 2015” from the Centers for Disease Control and Prevention (CDC), obesity in most states in 1994 was less than 18%. That is a 17% increase and almost twice as high in just 25 years. These are incredibly troubling statistics. There seems to be no sign of these rates slowing down. In addition there doesn’t seem to be any sort of solution being sought after or considered.

According to a journal titled, “NAFTA Largely Responsible for the Obesity Epidemic in Mexico” by Alana D. Siegel, in 2013 Mexico surpassed the United States for the most obese country in the world. Siegel explains that is called “nutrition transition” which is a result of globalization. Nutrition transition is defined as, “dual process of dietary convergence towards processed food consumption and dietary adaptation to a wider range of processed foods targeted at different niche markets.” This essentially means that as the food structure in Mexico changed after NAFTA, it opened up Mexico to a “western diet”. Western diets are filled with copious amounts of sugar and processed food which leads to obesity. Siegel explains that because food imports from the United States to Mexico went up from 1.8 billion dollars a year to 24 billion dollars in 2011. Siegel goes on to explain that most of these food imports from the United States to Mexico are considered “obesogenic foods”. Which means unhealthy foods. According to an NPR article titled, “How NAFTA Changed American (And Mexican) Food Forever” by Tracie McMillan, Mexico’s import of high fructose corn syrup, a sweetener high in calories that is directly linked to obesity, went up 863 times what they were pre-NAFTA. This incredibly large increase in this high calorie sweetener is astonishing. This is a direct link to how NAFTA restructured the diets of millions of Mexican families.

When it comes to solutions to these issues there are many being proposed. In February of 2018, an article titled, “5 Reasons Mexican Workers Would Cheer the Demise of NAFTA”, by Manuel Perez-Rocha, a journalist for Foreign Policy In Focus, he proposed a couple solutions to help Mexico with it’s agricultural issues as a result of NAFTA. These solutions are things such as renegotiating trade agreements with Mexico that include, “binding labor chapters, support small and medium companies and don’t rely on suppressing wages.” Perez-Rocha then continues on saying that Mexico should try to renegotiate a new agreement with NAFTA that protects workers rights and the environment. In addition, the new agreement should be one, “that strengthens our internal economy, devolves food sovereignty and self-sufficiency.” These are all complicated things that would involve a lot of politics and time between these three countries in order to come to an agreement.

On October 1 2018, the United States, Canada, and Mexico came to another agreement (USMCA) and settled on the renegotiation of NAFTA. President Donald Trump of the United States always said NAFTA wasn’t a fair deal, but he meant it wasn’t fair for America. According to two articles by the Economist,“The renegotiation of NAFTA is a relief. But it is not a success” and “Canada joins North America’s revised trade deal”, after the negotiations were finalized President Trump stated the negotiation was “an amazing deal for a lot of people”. The Economist best summarizes the USMCA as, “the new pact does contain improvements to NAFTA, taken as a whole it is a step backwards for free trade. As a result, it will harm America.” The article explains that some of the improvements are things like industrial jobs such as car manufacturing moving from Mexico to the United States, and Canada’s dairy market opening up more. Neither of these things help Mexico, if anything it only makes the problem worse. It’s taking jobs away from Mexicans, increasing the price of cars for Americans, and American car making manufacturers, encouraging them to outsource to places like China and other Asian countries.

According to an article titled, “ USMCA Is Not The Magnificent Trade Deal Trump Says It Is” by Forbes journalist, John Brinkley, USMCA is technically an “improvement” from NAFTA but it isn’t much of one, and it certainly isn’t much of an improvement for Canada or Mexico.Brinkley insinuates that both Canada and Mexico were basically bullied into the USMCA by President Trump. Throughout the USMCA negotiations President Trump constantly made rude remarks to Canada’s Prime Minister, Justin Trudeau, and Mexico’s President, Andrés Manuel López Obrador and threatened to increase tariffs for aluminum and steel.

The North American Free Trade Agreement sounded like a near perfect plan on paper. Unfortunately for millions of Mexicans, NAFTA was anything but perfect. Mexico’s agricultural business suffered greatly, specifically in the production and sale of corn, and the meat industry, where two million Mexican farmers lost their livelihoods. In addition, NAFTA had an incredibly negative impact on the health of millions of Mexican families through the increase of meat and high fructose corn syrup in their everyday diets. These three main issues were not resolved through the United States, Canada, and Mexico Agreement in 2018. According to an article from The Washington Post titled, “USMCA: Who are the winners and losers of the ‘new NAFTA’?”, by Heather Long, it’s very unclear as to how Mexico is supposed to benefit from this new agreement. The United States being a super power among countries should have eased into lifting tariffs and subsidies from Mexico. This may have helped the farmers from the developing country slowly adjust with NAFTA and the competition it created. This could have helped prevent millions of farmers from losing their jobs, and it may have slowed the rate of both legal and illegal immigrants coming to America looking for work.

References:

1. Bondarenko, Peter. “North American Free Trade Agreement.” Encyclopædia Britannica, 15 Jan. 2019, www.britannica.com/event/North-American-Free-Trade-Agreement.
2. Fanjul, Gonzalo, and Arabella Fraser. “Dumping Without Borders: How US Agricultural Policies Are Destroying the Livelihoods of Mexican Corn Farmers.” Oxfam International, Aug. 2003, pp. 1–33. http://oxfamilibrary.openrepository.com/oxfam/bitstream/10546/114471/1/bp50-dumping-without-borders-010803-en.pdf
3. Browning, Anjali. “Corn, Tomatoes, and a Dead Dog: Mexican Agricultural Restructuring after NAFTA and Rural Responses to Declining Maize Production in Oaxaca, Mexico.” Mexican Studies/Estudios Mexicanos, vol. 29, no. 1, 2013, pp. 85–119. JSTOR, www.jstor.org/stable/10.1525/msem.2013.29.1.85.
4. Dillon, Sam. “A Discredited President Returns to Mexico.” The New York Times, 13 June 1999, www.nytimes.com/1999/06/13/world/a-discredited-president-returns-to-mexico.html
5. Gálvez, Alyshia. “People of the Corn.” Eating NAFTA: Trade, Food Policies, and the Destruction of Mexico. : University of California Press, January 24, 2019. California Scholarship Online. http://california.universitypressscholarship.com.ezproxy2.library.colostate.edu/view/10.1525/california/9780520291805.001.0001/upso-9780520291805-chapter-002
6. Carlsen, Laura. “Armoring NAFTA: Battleground for Mexicos Future.” NACLA Report on the Americas, vol. 41, no. 5, Oct. 2008, pp. 17–22., https://citeseerx.ist.psu.edu/viewdoc/downloaddoi=10.1.1.838.1202&rep=rep1&type=pdf
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8. Kammer, Jerry. “The 2006 Swift Raids Assessing the Impact of Immigration Enforcement Actions at Six Facilities.” Center for Immigration Studies, Mar. 2009. https://cis.org/sites/cis.org/files/articles/2009/back309.pdf
9. Bacon, David. “NAFTA, the Cross-Border Disaster.” The American Prospect, 7 Nov. 2017. https://prospect.org/article/nafta-cross-border-disaster
10. Nti, Frank Kyekyeku. “NAFTA AT 21: STRUCTURAL CHANGE IN MEXICAN’S DEMAND FOR U.S. MEAT AND MEAT PRODUCTS.” International Journal of Food and Agricultural Economics, vol. 4, no. 4, 2016, pp. 1–10., www.foodandagriculturejournal.com/vol4.no4.pp1.pdf.
11. Johnson, Kristina, and Samuel Formartz. “NAFTA’s ‘Broken Promises’: These Farmers Say They Got The Raw End Of Trade Deal.” NPR, 2 Aug. 2017, www.npr.org/sections/thesalt/2017/08/07/541671747/nafta-s-broken-promises-these-farmers-say-they-got-the-raw-end-of-trade-deal
12. Sarah E. Clark, Corinna Hawkes, Sophia M. E. Murphy, Karen A. Hansen-Kuhn & David Wallinga (2012) “Exporting obesity: US farm and trade policy and the transformation of the Mexican consumer food environment”,International Journal of Occupational and Environmental Health, 18:1, 53–64, DOI: 10.1179/1077352512Z.0000000007 https://pubmed.ncbi.nlm.nih.gov/22550697/
13. CDC’s Division of Diabetes Translation. United States Diabetes Surveillance System. “Maps of Diagnosed Diabetes and Obesity in 1994, 2000, and 2015.” The Centers for Disease Control and Prevention, Apr. 2017, www.cdc.gov/diabetes/statistics/slides/maps_diabetesobesity94.pdf
14. Siegal, Alana D. “NAFTA Largely Responsible for the Obesity Epidemic in Mexico.” Washington University Journal of Law & Policy, vol. 50, 2016, openscholarship.wustl.edu/cgi/viewcontent.cgi?referer=https://www.google.com/&httpsredir=1&article=1916&context=law_journal_law_policy
15. McMillan, Tracie. “How NAFTA Changed American (And Mexican) Food Forever.” NPR, 13 Feb. 2015, www.npr.org/sections/thesalt/2015/02/13/385754265/how-nafta-changed-american-and-mexican-food-forever
16. Perez-Rocha, Manuel. “5 Reasons Mexican Workers Would Cheer the Demise of NAFTA.” Foreign Policy In Focus, 28 Feb. 2018, https://fpif.org/5-reasons-mexican-workers-cheer-demise-nafta/
17. “The Renegotiation of NAFTA Is a Relief. But It Is Not a Success.” The Economist, 4 Oct. 2018, www.economist.com/leaders/2018/10/04/the-renegotiation-of-nafta-is-a-relief-but-it-is-not-a-success.
18. “Canada Joins North America’s Revised Trade Deal.” The Economist, 4 Oct. 2018, www.economist.com/the-americas/2018/10/04/canada-joins-north-americas-revised-trade-deal.
19. Brinkley, John. “USMCA Is Not The Magnificent Trade Deal Trump Says It Is.” Forbes, 8 Oct. 2018, www.forbes.com/sites/johnbrinkley/2018/10/08/usmca-is-not-the-magnificent-trade-deal-trump-says-it-is/#2590035a4054.
20. Long, Heather. “USMCA: Who Are the Winners and Losers of the ‘New NAFTA’?” The Washington Post, 1 Oct. 2018, www.washingtonpost.com/business/2018/10/01/winners-losers-usmca-trade-deal/?noredirect=on&utm_term=.0572fc120935.