NAFTA: good for who?

While celebrations were being held in Washington on the successes of the North American Free Trade Agreement’s first ten years by the business elites and the ex-presidents of Mexico, the United States and Canada who signed the international trade pact known as NAFTA into law in 1993 (Carlos Salinas, Bush Sr. and Brian Mulroney) -mass demonstrations were taking place in Mexico to declare the Mexican countryside in a state of economic, social and environmental emergency.

Thousands of Mexican farmers and peasants have taken to the streets in Mexico City demanding a moratorium on NAFTA, provoked by the very real threats to their livelihoods when the tariffs on almost all agriculture products were reduced to zero on Jan. 1, 2003.

Recently, the current president of Mexico, Vicente Fox, announced that the agriculture chapter of NAFTA would be renegotiated because of the serious crisis of the Mexican rural areas. But the following day, due to pressures of the U.S. embassy, warning the Mexican government that “if tariffs are frozen, there will be a violent response of U.S. producers” the Mexican government backed down. This statement of the agriculture advisor from the U.S. embassy was published in one of Mexico’s daily newspapers, “La Jornada,” on Dec. 13.

Now, it is necessary to clarify an important point. When U.S. officials refer to “U.S. farmers” they must be referring to huge agribusiness firms and commodity groups – the same “farmers” promoting trade and benefiting from trade. These “farmers” back U.S. agriculture policies that maintain family farmers in poverty across the globe, while allowing agribusiness to enjoy record profits of up to 300 percent since NAFTA, while taxpayers pay the price.

In fact, family farm organizations wholeheartedly support the actions and arguments that Mexican farmers have presented over the last few weeks for several reasons:

1) Before NAFTA, trade experts predicted that NAFTA would create 170,000 U.S. jobs, while official figures show a loss of over 1,000,000 jobs;

2) Experts predicted a trade surplus with Mexico of up to $12 billion. In reality, in 2000 our trade balance with Mexico was negative $24.2 billion;

3) Commodity prices are at record lows, while prices to consumers have risen by 20 percent;

4) Prices that Mexican farmers receive for their corn have fallen by 48 percent since NAFTA, and the value of other crops has also fallen. The only positive trade balance is for the Mexican products of beer, tequila and mescal.

Mexican farmers are unable to compete with U.S. imports because our farm policy unfairly sets the minimum price far below a farmer’s cost of production whether in the United States or Mexico. In the United States, some of these losses are made up by payments made by taxpayers, not the companies that buy our commodities. Take the case of corn. For Mexico, a corn-producing society, it is cheaper to buy mass-produced U.S. Cargill corn than to grow their own.

Corn is exported to Mexico at prices below Mexico’s cost of production, otherwise known as “dumping”. However, if a farmer’s only source of income is selling their corn crop and they are unable to sell because of cheap Cargill corn in the Mexican market, they have no money to buy the imported corn, and no way to make a living. Not so coincidentally, regions with the highest rates of poverty and thus migration are also primarily producers of basic grains.

The United States and Chile just signed a free trade agreement. The next agreements are with Singapore, then Central America. After that is the Free Trade Area of the Americas (FTAA) which will include all of Latin America and the Caribbean except for Cuba, set for 2005. All of these agreements include agriculture, based on the NAFTA model. What will become of our farm economy then? What will become of the millions of small farmers throughout the entire Western Hemisphere who now are forced to compete with corporate agribusinesses who receive millions in farm subsidies?

Food security is equivalent to national security. Agriculture cannot be considered as just another sector of the economy left at the mercy of the “free” market in efforts to maximize profit. Therefore, small farmers in Mexico are right to demand protection for their agriculture products and a revision of NAFTA. We must demand the same. So next time you hear the words “free trade” and “national security” in the same sentence, ask yourself whose interests are truly represented.





Dena Hoff is a farmer in Glendive, Montana. He chairs the Free Trade Task Force of the National Family Farm Coalition, www.nffc.net