Myth: Illegal immigrants contribute greatly to the American economy.

Fact: So-called statistics supporting this myth are typically a deceptive amalgam of statistics and supposition arranged to conceal an undeniable truth. Consider, for instance, this statement from the ACLU paper Immigrants and the Economy (2002): "Immigrants pay more than $90 billion in taxes every year and receive only $5 billion in welfare. Without their contributions to the public treasury, the economy would suffer enormous losses." If 32.5 million immigrants (the total of legal and illegal immigrants, according to the recent U.S. Census figures) really pay $90 billion in taxes, then they pay half the taxes the average native-born American pays. Note too that the ACLU combines both legal and illegal immigrants into its statistic. Most taxes paid by immigrants are paid by legal immigrants. Illegal immigrants often pay little or no taxes because many of them are working "under the table" in the underground, cash-based economy.

Welfare is a term limited to only a few federal subsidy programs, and the Center for Immigration Studies (CIS) notes: "Even though illegal aliens make little use of welfare, from which they are generally barred, the costs of illegal immigration in terms of government expenditures for education, criminal justice, and emergency medical care are significant." CIS estimates that the total net cost of illegal immigration is an annual drain on the government of $11-22 billion annually.

Myth: We are a nation of immigrants.

Fact: This myth is false on its face. Nearly 88 percent of the people living in the United States today are not immigrants; they were born here. This is a nation of natives, not a nation of immigrants. "But," the liberal propagandists reply, "we all have ancestors who come from other countries." And, one might reply, so does just about every other nation on Earth.

Are not the French merely descendents of the immigrant barbarian Franks, who drove out the Roman era Celtic Gauls? And the English are simply immigrant Angles and Saxons who virtually wiped out the Celtic Britons in the fifth century A.D. They too are simply nations of immigrants under this liberal myth, as is practically every other nation on Earth. The myth descends to meaninglessness upon any serious analysis. Yet whenever this myth is uttered, we are expected to nod our heads in agreement that a deep and salient point has been made.

Myth: You cannot deport 12 million people.

Fact: This is nothing more than a slogan for people who have stopped trying to address the problem. The U.S. government needs to begin deporting illegal aliens, and even if it only deports a fraction of them over the next few years that would be progress. If the Immigration and Customs Enforcement agency deported only two million of the 12 million illegal aliens, 10 million illegals would be better than 12 million.

Congressman Tom Tancredo (R-Colo.) notes that enforcing employer sanctions could lead many to go home on their own without deportation proceedings: "If you can't get a job in this country, and if you can't get social service benefits, you go home." Additionally, a lot of immigrants visit families on their own, and wouldn't be able to get back in if Congress decides to secure the border.

On the other hand, if the 12 million illegals are legalized, none would be deported. Moreover, this amnesty (whether called amnesty or not) would simply induce more illegals to cross the Rio Grande in the hopes of waiting until the next amnesty.

Myth: Illegal immigrants are only taking jobs Americans do not want.

Fact: Many illegal immigrants are able to work for less than market value because they don't pay income or Social Security taxes and are able to take their entire paycheck (or cash) home. This is not only unfair competition against employers who follow the law and pay employees "above the table," but it depresses the wage scale for Americans who would otherwise select jobs currently filled by illegal immigrants. These are jobs that Americans "do not want" only because the illegal immigrants have depressed the wage scale for the positions. Take away the illegal immigrants, and the market would raise wages to the level where Americans would take the jobs.

Myth: Guest workers would only be here temporarily.

Fact: History demonstrates that "guest workers" would be as temporary as the "temporary" telephone tax, still in effect, that Congress enacted in 1898 to pay for the Spanish-American War. And what would happen if 12 million "guest workers" decided not to leave? Those who argue against deporting the current 12 million illegal aliens as impractical are likely, if challenged, to say they find the prospect of deporting "guest workers" impractical as well.

Thus, it is hardly surprising that President Bush fails to mention a time limit on the "temporary" worker visas the federal government would permit under the "guest worker" program he is pushing in his public addresses. Most pending congressional legislation would limit the "guest worker" to three years — but what then?

Myth: Illegal immigrants have a right to come here. It is our Christian duty to provide hospitality.

Fact: Nearly two-thirds of the 32.5 million foreign-born people living in the United States entered this country legally, and the United States has more legal immigrants than any other country in the world. That's hardly poor hospitality, and no bill before Congress that has a chance of becoming law would change this nation's hospitality. But it is poor hospitality to say to the nearly 22 million legal U.S. immigrants who waited in line that they wasted their time following the rules because illegal immigrants will now get the same status.

The need to deport illegal aliens and secure our borders has nothing to do with persecuting minorities or lack of hospitality. The United States can continue to allow a large or small number of immigrants into this country legally, depending upon how many can be reasonably assimilated without destroying our American identity. Rather, securing our borders is necessary as a matter of principle — in the interests of equal justice under law — as well as practical security in this age of international terrorism. And this nation can no longer afford to allow "myth-information" slogans to sidetrack the nation from fulfilling the mandate of controlling the borders.

Suppose the Mexican government refuses to take them back. Then what?

Fair question. Well, we do have a little bit of leverage. It is called BOYCOTT.

Mexico has a very lucrative produce export business. If they don't take their folks back...then their produce rots in the cold storage...south of the border, and does not cross into the good ole' USA.

As the Captain said on Hunt for Red October, "The secret to playing Chicken, is knowing when to blink."

Something tells me Jorge Fox don't know how to play Chicken.....

RM 6-8.0
4-98

North American Free Trade and U. S. Agriculture

Curriculum Guide

I. Goals and Objectives

A. Understand what NAFTA is and how it affects trade.
B. Understand how NAFTA may impact Texas and U. S. agriculture.
C. Understand impacts of NAFTA on selected commodities.

II. Description/Highlights

NAFTA, negotiated between the United States, Canada, and Mexico was implemented on January 1, 1994. It created one of the world's largest free trade areas. The three member countries have a combined population of 385 million people, $8.5 trillion in annual economic output, and annual trade exceeding $2.0 trillion.
NAFTA is designed to expand the flow of goods, services, and investment throughout North America. In contrast to the Uruguay Round Agreements (URA) which only reduce tariffs and increase import quotas, NAFTA calls for (1) the full, phased elimination of import tariffs and (2) the elimination or fullest possible reduction of nontariff trade barriers, such as import quotas, licensing schemes, and technical barriers to trade.
Mexico has become the third largest market for U. S. agricultural exports, purchasing food and fiber valued at $5.4 billion in 1996. Major U.S. agricultural exports to Mexico include grains, meats and livestock products, fruits, nuts, vegetables and other horticultural products. Exports of beef, poultry, pork, corn, and soft fruits increased during 1994, NAFTA's first year (Figure 1).
U.S. agricultural imports from Mexico were valued at $3.8 billion in 1996, up 31 percent since 1994 (Figure 2). Major imports were vegetables, live animals--mainly feeder cattle, coffee, fruits, nuts and malt beverages. Competitive imports have increased since NAFTA was implemented, leading to more competition for some U.S. producers.
NAFTA is expected to have a positive overall impact on U.S. agriculture. The USDA estimates that U.S. agricultural exports to Mexico could increase by $2.0 billion per year after NAFTA is fully implemented. Gains in grains, meats, poultry, and cotton are likely to offset losses expected in the fruit and vegetable sectors.
Increased U.S. export demand will raise U.S. prices, unless there is corresponding increase in supply. Consumers of some products will be worse off if higher prices are passed on to them. More imports increase the supply available to consumers and prices will drop, unless domestic suppliers reduce production in the face of these lower prices. The net benefits from trade depend on the balance between trade gains and losses and the resulting impacts on prices, jobs, income, taxes, and social costs.
Feedlots, meat packers, and processors should benefit from larger export volumes. It has been estimated that at least 432,000 additional fed steers will be required to meet Mexican import demand. U.S. feedlot operators would experience small gains associated with additional volume. Feed grain producers will also benefit because these steers should consume an additional 351,000 tons of feed grains.
A 15% seasonal tariff on grain sorghum was eliminated on 1/1/94. Corn trade is being liberalized more slowly due to its political and social importance in Mexico. Under a tariff-rate quota, a minimum of 2.8 million tons of corn may now enter Mexico duty free each year. The quota was exceeded by more than 3.0 million tons in 1996 due to drought in Mexico and a short crop. The duty-free quota will grow three percent annually, and the 180.6 % duty on over-quota corn imports will be eliminated over 15 years. Mexican demand for U.S. feed grains has increased as more grains are fed to cattle, hogs, and poultry.
U.S. wheat exports have expanded from 321,000 tons in 1990 to 1.5 million tons in 1996. NAFTA will result in gains for input suppliers and grain elevators as trade volume expands. Intense competition from Canada has curtailed U.S. export growth in recent years. Price impacts will be small because U.S. wheat prices are determined by many global factors.
Exports to Mexico should expand moderately as Mexico lowers its current 10% duty on rough rice and a 20% duty on milled rice. Both duties will be phased out over 10 years. U.S. rice exports have increased since 1990, to 390,000 tons in 1996. This represents about 10% of total U.S. exports.
U.S. cotton producers should benefit from increased exports and slightly higher prices as Mexico's 10% duty is reduced over 10 years. Since 1990, U.S. cotton exports to Mexico have expanded from 204,500 bales to 689,000 bales in 1996. Mexico will gain greater access to the U.S. market as the Section 22 quota is replaced by a tariff-rate quota. U.S. cotton imports from Mexico reached 47,000 bales in 1996, up from almost nil in 1990.
NAFTA was projected to have a small positive impact on U.S. peanut producers. A stronger Mexican peso, coupled with more production, reduced U.S. peanut exports to 4,500 tons in 1996. U.S. exports can be expected to increase moderately to about 25,000 tons. The U.S. will use a tariff-rate quota to limit shipments from Mexico. NAFTA provisions allow only Mexican grown peanuts to be processed into peanut butter and paste for low duty shipment to the U.S. market. However, it is also likely that higher consumer incomes in Mexico will lead to increased demand for U.S. grown raw peanuts, resulting in additional exports.
Agribusinesses associated with these industries can expect both positive and negative impacts. Suppliers of seed, fertilizer, and other chemicals may experience minor losses as the production of some crops declines. Specialized infrastructure, such as packing shed operations, may gain as imported volume expands and capacity increases. Some operations may survive only by relocating nearer to production areas in Mexico. Both farm and non-farm labor can expect some lost employment opportunities as imports of Mexican produce expand. The overall impact on employment cannot be predicted with presently available information.
Under NAFTA, there is the potential for more commercial exports of milk powder and evaporated milk to Mexico. In the past, Mexico has imported large quantities of subsidized dairy products from the U.S. In the short run, it is likely that U.S. government export programs will continue to be an important factor affecting the level of Mexican dairy imports. U.S. cheese producers will probably benefit from NAFTA because the Mexican cheese import licensing scheme will be replaced with a twenty percent tariff to be eliminated over ten years. Lower Mexican tariffs on fluid milk, which will decline from 10% to zero over ten years, will create a larger market for U.S. products, resulting in expanded export demand and higher producer prices. U.S. consumers may face slightly higher milk prices in some areas.

III. Potential Speakers

A. Extension Economists
B. Global Business Managers
C. National or State Government Officials
D. Marketing Club Leaders

IV. Review Questions

A. What two steps does NAFTA take to open up trade between the three countries?

1) phases out all existing import tariffs, 2) eliminates or reduces as much as possible all nontariff trade barriers.

B. How is NAFTA expected to impact U.S. Agriculture and why is that impact difficult to assess?

NAFTA is expected to have a positive impact overall, but it is hard to assess due to its mixed impacts on some sectors and the influence of global market conditions on most products.

C. NAFTA will impacts many products. Where will the effects of NAFTA be the most evident in Texas?

Beef and Cattle, Feed Grains, Wheat, Rice, Cotton, Peanuts, Vegetables, and Dairy Products

V. For More Details

International Trade Leaflet Series, Leaflets 7, 8, 9, and 10 located at: http://agrinet.tamu.edu/intlagmktg/

Potential for Agricultural Trade

Mexico third largest market for U.S. agricultural export
NAFTA expanded competitive imports from Mexico

Figure 2. US Agricultural Imports from Mexico Pre and Post-NAFTA

NAFTA Commodity Impacts

Expected positive overall impact on U.S. agriculture
Mexico likely to benefit from lower prices

Beef and Cattle

Higher prices for beef and beef by-products
Larger exports will benefit feedlots, meat packers, processors, and feed grain producers
Low cost Mexican cattle may impacts U.S. ranchers

Feed Grains

Mexican demand for U.S. feed grains increasing
Growth expected in corn

Wheat

NAFTA will boost gains for input suppliers and grain elevators
Small price impacts due to global factors

Rice

Moderate expansion of exports to Mexico
Mexico represents 10% of U.S. exports

Cotton

U.S. producers benefit from higher prices and expanded exports
Mexico may expand exports

Peanuts

Increased demand for U.S. peanuts
Growing markets for products

Fruits and Vegetables

Lower returns for some U.S. producers
U.S. exports of non-citrus and fresh deciduous fruits will increase
NAFTA is projected to have a slight negative impact on U.S. citrus
Agribusiness expect varied results

Dairy Products

Potential for greater exports of milk powder and evaporated milk
U.S. cheese will have access to larger market
Higher price and expanded exports in U.S. fluid milk

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