Notoriously, the NAFTA agreement of a quarter of a century ago steamrolled small Mexican corn farmers in favor of Midwestern mass producers. The first Bush Administration knew that NAFTA would increase illegal immigration, but it didn’t care.
Here’s a classic upside-down New York Times article.
Mexico Ready to Play the Corn Card in Trade Talks
By KIRK SEMPLE APRIL 2, 2017
MEXICO CITY — From the hundreds of millions of tortillas consumed every year to the countless tons of corn-enriched feed that fattens livestock and poultry, corn is perhaps Mexico’s most important agricultural commodity, one at the center of its life and culture.
Now corn has taken on a new role — as a powerful lever for Mexican officials in the run-up to talks over Nafta, the North American Free Trade Agreement.
The reason: Much of the corn that Mexico consumes comes from the United States, making it America’s top agricultural export to its southern neighbor. And even though President Trump appears to be pulling back from his vows to completely overhaul Nafta, Mexico has taken his threats to heart and has begun flexing its own muscle.
The Mexican government is exploring buying its corn elsewhere — including Argentina or Brazil — as well as increasing domestic production. In a fit of political pique, a Mexican senator even submitted a bill to eliminate corn purchases from the United States within three years. …
American corn shipments to Mexico totaled nearly $2.6 billion last year and are part of an elaborate agricultural trade relationship between the two nations that has helped to interlace their economies.
As I’ve often pointed out, the NYT tends to employ first rate reporters, but it strikes a devil’s deal with them: rather than put the interesting news at the beginning of the article, the good stuff gets hidden away at the end. NYT reporters are significantly smarter than NYT subscribers, but they are only allowed to disturb the worldviews of the small fraction who read all the way to the end.
For example, here’s the 34th of 36 paragraphs:
Some economists blame Nafta for causing widespread unemployment in the Mexican agricultural sector by opening the floodgates to heavily subsidized American agricultural products, especially corn. A 2014 study estimated that 1.9 million agricultural jobs were wiped out, mainly those of small family farmers, helping to drive more illegal immigration into the United States.
You might call that, at minimum, cultural appropriation.
So, in return for $2.6 billion in corn sales, plus other crops, NAFTA put 1.9 million Mexican peons out of work, many of whom illegally migrated to the U.S., where taxpayers are paying for their children’s education, their medical care, and their imprisonment and food stamps.
What kind of deal is that?
Here’s the abstract of that 2014 study:
February 2014, Mark Weisbrot, Stephan Lefebvre, and Joseph Sammut
This paper compares the performance of the Mexican economy with that of the rest of the region over the past 20 years, based on the available economic and social indicators, and with its own past economic performance. Among the results it finds that Mexico ranks 18th out of 20 Latin American countries in growth of real GDP per person, the most basic economic measure of living standards; Mexico’s poverty rate of in 2012 was almost identical to the poverty rate of 1994; real (inflation-adjusted) wages for Mexico were almost the same in 2012 as in 1994; and unemployment has increased significantly. It also notes that if NAFTA had been successful in restoring Mexico’s pre-1980 growth rate – when developmentalist economic policies were the norm – Mexico today would be a relatively high income country, with income per person significantly higher than that of Portugal or Greece. It is unlikely that immigration reform would be a major political issue in the United States, since relatively few Mexicans would seek to cross the border.
It’s almost as if NAFTA benefited capitalists on both sides of the border, such as Carlos Slim, at the expense of labor.
Mexico’s economy has grown an average of just 2.5 percent a year under Nafta, a fraction of what was needed to provide the jobs and prosperity its supporters promised. More than half of Mexicans still live below the poverty line, a proportion that remains unchanged from 1993, before the deal went into effect.
Wages in Mexico have stagnated for more than a decade, and the stubborn gap between the nation’s rich and poor persists. A majority of workers in Mexico toil in the obscurity of under-the-table jobs at workshops, markets and farms for their survival.
New technologies, meanwhile, have cut many jobs while increasing productivity, which is good news for businesses but a blow to the work force.
“Mexico is seeing exactly the same phenomenon as in the United States,” said Timothy A. Wise, a research fellow at Tufts University. “Workers have declining bargaining power on both sides of the border.”