Tag Archives: nafta

Mexico’s Reckoning with NAFTA and GMO Corn

By Julie Etra

Andrés Manuel López Obrador (aka AMLO), president of Mexico, recently called on Mexican farmers to stop using the herbicide glyphosate by 2024. By his final executive order of 2020, AMLO made a surprising decree to phase out both genetically engineered corn (GE, maíz transgénico), often referred to as GMO, or genetically modified, corn, and the use of the herbicide glyphosate.

Glyphosate, commercially known as Roundup, is a non-selective herbicide in that it kills all herbaceous (non-woody) vegetation to which it is applied. GMO corn, however, has been genetically modified to tolerate glyphosate. This creates a market cornered by the multinational agro-chemical giant Monsanto (bought out by Bayer in 2016), as they produce both the genetically modified corn (among other crops) and the herbicide. The national campaign, known as “Without Corn There is No Country” (Sin Maíz, No Hay País), and Greenpeace Mexico support the initiative that opens a path to eventually eliminate the use of glyphosate in Mexico by 2024. They urged AMLO to sign and publish the decree in the government’s Official Gazette of the Federation (Diario Oficial de la Federación), which occurred on December 31, 2020.

According to Reuters (May 24, 2021), the decree has held up: “A Mexican federal judge ruled against a request by the National Farm Council to freeze a government plan to ban genetically modified (GMO) corn and the widely used herbicide glyphosate by 2024, the national science council said on Monday. Judge Martin Adolfo Santos Perez’s ruling allows the executive order issued by President Andres Manuel Lopez Obrador late last year that outlines the planned ban to proceed.”

This is a huge economic issue. Since the passing of the North American Free Trade Agreement (NAFTA) during the Clinton administration (1992), there has been a catastrophic decrease in domestic production, particularly of what we would call heirloom corn (maíz criollo) by small farmers who could not compete with the industrially-produced U.S. corn that poured into Mexico after passage of NAFTa. (An essential read on the subject is Eating NAFTA: Trade, Food Policies, and the Destruction of Mexico, by Alyshia Gálvez [Oakland, CA: University of California Press, 2018]).

On the Mexican side, President Carlos Salinas de Gortari signed NAFTA betting that privatizing the economy and relying on market forces would modernize and grow the country, so to speak. This has not quite worked out as planned. Of the 20.4 million metric tons of corn imported by Mexico from the United States during from 2018 through March 2020 – 95% of it yellow corn, and 78% of it (16 million tons) in 2020 alone. According to Mexico’s national feed association (CONAFAB, Consejo Nacional de Fabricantes de Alimentos Balanceados y de la Nutrición Animal), Mexican feed companies used about 11.1 million tons of imported corn in 2020, the vast majority of it sourced from U.S. farmers; U.S. corn represented nearly 70% of the sector’s total corn purchases for the year.

What remains unclear as of this writing is that, although the ban would eliminate GMO corn for human consumption, the decree did not clarify what products would be included and it appears that feed corn would be exempt from the decree.

On the other hand, and as the wagons circle, the executive decree of course has its detractors. Mexico’s national association for Crop Protection, Science and Technology (PROCCYT, Protección de Cultivos, Ciencia y Tecnología), among others, rejected the order. PROCCYT warned that “the greatest economic and social blow will be dealt against Mexican farm workers, by promoting the publication of the Decree by which any possibility of import and use of glyphosate to protect food crops, despite the fact that it is scientifically proven that this herbicide does not harm health or the environment.”

But supporters of the decree have vowed to “defend our corn, since Mexico is considered the center of origin, domestication and diversification of at least 64 breeds of corn, and more than a thousand other species, including chili, beans, squash, vanilla, cotton, avocado, cocoa and amaranth.” The origin of corn is indeed Mexico, and more specifically the state of Oaxaca, where it was cultivated from its ancestor, the wild plant known as teosinte. Corn has achieved its current robust form over 8,000 years of plant breeding (my three-part article on the history of corn in Mexico appeared in The Eye in 2012).

Although there are few valid studies that link glyphosate to human health problems, the selective breeding of corn just for the ease of industrial production and the associated resistance to herbicides (and maximum profit) is anathema to Mexican culture, and has resulted in loss of nutrition and exhaustion of the soil as a natural, living resource. This depleted soil now relies on huge inputs of commercially produced, high nitrogen fertilizer, accompanied by its own suite of environmental problems. And the summer sweet corn we are accustomed to eating in the USA is mostly water and sugar and tastes nothing like the street corn – esquites y elotes – we find locally.

From this writer’s perspective Mexico has taken a big, progressive step forward.

Editor’s Letter

By Jane Bauer

“Sugary drinks are blamed for increasing the rates of chronic disease and obesity in America. Yet efforts to reduce their consumption through taxes or other measures have gone nowhere. The beverage industry has spent millions defeating them.” Robert Reich

The ritual of beverages: morning coffee, glass of wine with dinner, champagne for celebrations, hot chocolate for first snowfalls and a lime margarita once your toes hit the sand as you embark on a holiday. Most of us are quite committed to the ritual of our drinking habits, whether it is a ‘grande non-fat chai latte’ from Starbucks at the airport or your favorite brand of beer when watching your favorite sports team.

In this issue our writers explore beverages. Mexican classics such as coffee, chocolate, beer and pulque. I was driving through my village while contemplating what to write about for my editorial when I spotted a six-year old boy I know coming out of the tienda. Barefoot and with a little puppy nipping at his heels, he struggled to hold the 2-liter bottle of Coca-Cola he’d just purchased. Ugh how could I have overlooked the most important beverage crisis that Mexico faces.

After the implementation of Nafta on January 1, 1994, Mexico saw a dramatic rise in consumption of sugary beverages and processed foods.

“In addition to dramatically lowering cross-border tariffs, Nafta let billions of dollars in direct foreign investment into Mexico, fueled the growth of American fast food restaurants and convenience stores, and opened the floodgates to cheap corn, meat, high-fructose corn syrup and processed foods” (New York Times, Dec. 11, 2017).

The rise in diabetes and obesity in Mexico was a huge factor before the pandemic, but has never been more paramount than now, given that these conditions make people at much greater risk.

One of the ways that junk food has infiltrated small communities that have traditionally been very self-sufficent – growing corn, fishing, relying on the vegetation found around the village – has been to offer inexpensive non-perishable products and incentives such as free refrigerators and even low-interest loans for expansion.

A new development is stickers on processed foods warning people about high sugar and fat contents. Whether this will lead to a reduction in consumption of such foods has yet to be determined. The state of Oaxaca did implement a law making it illegal to sell junk food to minors. Enforcement is another beast entirely.

“In the rural Oaxacan town of Villa Hidalgo Yalálag, citizens have physically blocked chips and soda delivery trucks from entering since April, saying they don’t want outsiders to bring in the coronavirus or junk food” (NPR ,September 14, 2020).

I don’t know if that is the answer, but I do know we need to start asking the question.

Cheers,

Jane

What Happened with NAFTA?

By Jan Chaiken and Marcia Chaiken

The North American Free Trade Agreement (NAFTA) went into effect in 1994 and effectively made the US, Mexico, and Canada into a single trading zone without tariffs for many products, or lower tariffs than applied to other trading partners. While the treaty was originally envisioned as a mechanism for creating new employment opportunities and enhancing working conditions and standards, its main impacts were an enormous increase in the amount of goods traded among the three nations and a sudden spurt of Mexican nationals moving to the US for employment (a migration that ended after a few years but left a large residue of Mexican citizens living and working in the US). NAFTA also stimulated the creation of entirely new methods of production between the US and Mexico. US companies export intermediate components to manufacturing companies in Mexico, which assemble the finished product and export it back to the US. As a result, now over 40% of the content of goods imported into the US from Mexico is of US origin. This form of cooperation has helped make US businesses more globally competitive,

Even before he was elected president, Donald Trump declared NAFTA to be the worst trade deal ever made, and after he took office, he initiated renegotiation of the treaty. A revised treaty was signed by the presidents of the US and Mexico and the prime minister of Canada on November 30, 2018, a date chosen specifically because the next president of Mexico, an outspoken opponent of NAFTA, took office the following day. In addition, the Democratic party had already been elected to a majority in the US House of Representatives, but the new members had not yet assumed power to assert their objections to the treaty. This effort by the signers to nail down a new treaty in the face of obvious forthcoming impediments did not succeed, and eventually the trade negotiators returned to the bargaining table. The revised version of the new treaty was ratified by the Senate of Mexico in December 2019 and by the US Congress and President by the end of January 2020. Canada waited for the other parties to act on revisions, and now the ratification process has begun in Canada but may take several months more. The new treaty will take effect 90 days after all three countries have ratified it.
The renegotiated treaty is called USMCA in the United States and T-MEC in Mexico. (The government of Mexico always invents more pronounceable acronyms!.) All told, what are the changes? Despite the bombast and rhetoric that arose from interested parties, the new treaty is remarkably similar to NAFTA. The main effect of enacting a new treaty is to end uncertainty as to whether there will be any treaty at all going into the future – if NAFTA had been simply terminated, the normal operations of many companies would have been thrown into substantial chaos.

Among its changes are a requirement that more components for vehicles be produced in the three countries in order to avoid tariffs, and a provision that 40% of each vehicle must eventually be produced by workers who earn at least $16 US per hour (about 3 times as much as is currently paid to the average Mexican factory worker). Trump has touted this provision as necessarily returning more automobile production to the United States and a subsequent increase in jobs for Americans. But if average wages for Mexican auto workers go up by increasing the salaries of industry administrators, low paid jobs will remain in Mexico and prices for U.S. cars and trucks will noticeably rise.

The treaty also gives US dairy farmers access to a larger proportion of the Canadian dairy market than in the past. In particular, more American cheese, milk and butter can be sold in Canada. Correspondingly US consumers will have access to more Canadian dairy products. Canadian sugar can also be marketed in the U.S.

Perhaps ironically, the most sweeping changes in the new NAFTA were proposed, not by the Trump administration but by Democrats in the US Congress. These included provisions related to new labor laws in Mexico that will allow Mexican workers to form independent unions, prevent forced labor, and have increased control of their contracts. The final USMCA treaty includes benchmarks and inspection protocols that will allow enforcement of the labor provisions. Other late changes to the treaty protect the environment by preventing outsourcing of pollution and related jobs to Mexico, but no specific benchmarks for controlling climate change were included in the renegotiated treaty. The Democrats also won a concession from Trump with a provision change that prevents large drug companies from retaining the rights to a class of extremely expensive pharmaceuticals for ten years and from obstructing the sale of equally effective generic forms of the drugs.

One of Mexico’s main original goals in negotiating a new trade agreement was to update and modernize the list of products so as to include ones that didn’t exist when NAFTA went into effect or that had changed substantially in their nomenclature or mode of manufacture or distribution since 1994. The text of the new treaty covers a variety of digital products and intellectual property rights that were not previously included.

Although the ratification of the new NAFTA provides more certainty in the Mexican, American, and Canadian markets, true to his style of governing by chaos, Trump inserted a sunset provision in the treaty. Any one of the three partner countries can pull out of the treaty six years after all have signed and, after a substantial delay, leave the trading partnership. But, by then, the Trump administration will be over, gone; it is hoped that North America and the rest of the world will be back on track to improving global prosperity rather than serving strictly corporate interests.