NAFTA Fully Loaded
Posted: January 3, 2008
Fourteen years after the North American Free Trade Agreement was signed it has been fully implemented. As of Jan. 1, the final trade restrictions on U.S. exports of corn, dry edible beans, dry milk and high fructose corn syrup were removed under the agreement. This has sparked protests by farmers in Mexico.
Now, is it just me, or does this not make any sense? Just a few months ago, there were protests in Mexico over the price of tortillas increasing because of higher corn prices, right? Now, protesters say the “free entry of relatively cheap U.S. corn would devastate rural Mexico,” according to an LA Times story.
The article goes on to says that about 100 Mexican farmers partially blocked the border crossing between El Paso, Texas, and Ciudad Juarez, carrying signs that read “Without Corn There Is No Country.”
Here’s the kicker. “Mexico’s tortilla producer association said the final implementation of the treaty would reduce the number of Mexican corn producers and could lead to a 20% to 30% increase in the price of tortillas. It gave no details.”
Huh? Corn from the US is suddenly “relatively cheap” and now that it can be exported to Mexico without restrictions it will result in HIGHER tortilla prices. It gets even more confusing.
Mexican imports of U.S. corn have risen from less than 1 million metric tons in 1993 to 9.9 million metric tons in the 2006-07 marketing year that ended in July, according to statistics from the U.S. Agriculture Department.
The majority of the imports are of yellow corn, which is used to feed livestock and to make corn syrup. There are about 1.5 million corn farmers in Mexico and most grow white corn, which is used to make tortillas.
NAFTA critics say Mexican farmers cannot compete with their American counterparts because the government subsidies they receive are paltry compared with those given to U.S. farmers.
So, US corn exports to Mexico are increasing, but it’s not the type of corn used to make tortillas, which Mexican farmers tend to grow. But, they can’t compete with US corn farmers. I don’t get it.
Cynthia1770 Said,
January 5, 2008 @ 1:24 pm
Hi Cindy,
My google alert for HFCS picked up your article. Personally, I
think that Mexico got the raw end of the deal, now required to
import HFCS DUTY FREE. The US Corn Refiners Association
has been importing that industrial sweetener for a while, but
Mexico, trying to support their sugar growers, placed a high
import tax on soft drinks with HFCS. NAFTA lawyers and US senators cried foul and that is why effective Jan 1, HFCS is being imported to Mexico sans Mexican import taxes. As to
importing cheap corn: Yes, that will destabilize the corn growers,
of Mexico regardless of the type of corn the Mexican farmer grows, and it will cause an increase in the price they pay for
foods, because it will the force the Mexican farmer to lower his
price for selling his corn to compete with the cheaper imported
corn. This will consequently lead to out of work farmers, due to
their lower income and inability to pay for their supplies and
the workers’ labor. Finally, when you have fewer producers of
any product, prices increase, sometimes dramatically. (Basic laws of supply and demand) We did this in Jamaica a few years a go and it was heartbreaking. Jamaica had a beautiful little economy in the dairy industry. The Jamaican dairy farmers
employed many and provided healthy milk for the nation. Then
we, by virtue of free trade agreements, started importing dry
milk very cheaply. It destroyed not only the Jamaican dairy industry, but their national economy as well. I saw a PBS
documentary on the story and it was very unsettling.
Acutally, I am not interested in the economics of HFCS trading,
I am more interested in the health aspects of our nation eating
and drinking the industrial sweetener. It has been attributed to
our trend to obesity, increase in Type II diabetes, and other
health hazards. Read your food labels hawkishly. Take care.