Posted on 12/05/2002 12:52:52 AM PST by sarcasm
MEXICO CITY — For decades, the Mexican countryside has seen the country's worst poverty and sent legions of job seekers to the United States. That engine of misery and migration could soon accelerate.
Next year, the North American Free Trade Agreement (NAFTA) calls for almost all tariffs on farm goods to be phased out, creating opportunities for thousands of U.S. farmers and a handful of top Mexican producers.
But falling tariffs could also sound the death knell for much of Mexico's inefficient farm sector and spell economic chaos for the millions of people who depend on it.
"Before, the countryside was the caboose of the Mexican economy," said Victor Suarez, the executive director of National Association of Rural Producers, a nonprofit group in Mexico City. "Now the caboose has been decoupled from the rest of the train."
Long a chronic sore in the North American economy, rural Mexico is quickly becoming a leading illustration of the hidden costs of free trade, as well as the economic benefits.
When NAFTA took effect in 1994, Mexican officials argued that market discipline would force the nation's farmers to modernize. Some did just that, boosting exports of farm goods to record levels and making Mexico the No. 2 agricultural supplier to the United States, after Canada.
"There are those who look backward and think that the past was better, that it was more secure and less demanding to have a closed domestic market," said Javier Usabiaga, President Vicente Fox's agriculture and livestock minister. "But that's over, and it's necessary to accept it."
Still, for millions of other Mexican farmers, a lack of investment and know-how has made it hard to compete with their highly efficient, highly subsidized U.S. counterparts.
As a result, the outlook is bleak for the 25 million people who live in rural areas. About 20 percent of all jobs in Mexico are in the countryside. But agriculture, livestock and fishing account for about 5 percent of economic output.
Armando Molina, 28, got a lesson in the mathematics of inefficiency. He traded his job picking avocados and milking cows in the western state of Michoacan for work milking cows in Bakersfield, Vt.
Now, he earns more in one hour than he did in one day in Michoacan, and he's able to send home $300 a month to his wife and three children.
"We're keeping the farms alive here, while back home our own farms slowly die," he said. "The Mexican countryside is simply an illusion. It doesn't exist anymore."
Beginning Jan. 1, NAFTA calls for the elimination of Mexican import tariffs on nearly all U.S. agricultural goods, from potatoes and pork to poultry. U.S. tariffs on some Mexican goods come off, too.
Some tariffs will fall to zero from less than 2 percent. Other products, such as chicken meat, will see import tariffs fall from nearly 50 percent to zero.
In Mexico, tariffs will remain only on corn, sugar and some dairy products. All tariffs will go in 2008.
Suarez is trying to persuade the Mexican Congress to postpone some of NAFTA's agricultural provisions. But that effort has little chance of success.
Jeffrey Davidow, the former U.S. ambassador to Mexico, said agricultural trade could fuel tension between the United States and Mexico in 2003.
Adding to the resentment south of the border, President Bush has approved farm subsidies worth nearly $180 billion over the next 10 years. Such subsidies help U.S. farmers offer lower prices than foreign competitors. Agriculture is likely to lead the list of disputes at the binational meetings this week between U.S. and Mexican officials in Mexico City.
Next year "will be one of consistent difficulty," Davidow said recently to reporters in Washington, D.C. "It'll be a conflictive period."
In recent days, Mexican farmers have protested their growing hardships by blocking major highways, disrupting roads to tourist centers and shutting down bridges to the United States.
Fox, meeting with Secretary of State Colin Powell, Attorney General John Ashcroft and other U.S. Cabinet members in Mexico City last week, said: "We must cooperate so we don't affect income levels in the Mexican agricultural countryside, to maintain its economic viability and reduce immigration pressure to the north."
Last week, Fox announced a $10 billion aid program to the agricultural sector that he said would help it cope with coming turmoil. Many analysts dismissed the package as insufficient to solve the severe problems in the countryside, where millions of people live in extreme poverty.
Powell and other U.S. officials visiting Mexico last week defended NAFTA, which has sharply increased trade between the two countries. Last year, Mexico exported $6.1 billion worth of agricultural products to the United States, and American producers sent $7.9 billion worth to Mexico.
Cross-border trade got another boost last week when President Bush lifted a long-standing ban on Mexican trucks and buses operating in the United States. Citing safety and pollution concerns, Washington had resisted such an opening, which is called for under NAFTA. But an international trade panel ruled two years ago that the United States had violated the terms of NAFTA by refusing entry to Mexican trucks, and Bush relented. Now those vehicles will soon begin hauling cargo to and from the United States.
NAFTA is hardly responsible for all the woes afflicting the Mexican countryside.
Almost 300,000 farmers in southern Mexico grow coffee. International coffee prices have plummeted in recent years not because of NAFTA but because of rising international production.
Moreover, some Mexican farmers and ranchers have prospered mightily from NAFTA. Their success lends credence to the argument that free trade will encourage more efficient farming, and benefit those who can take advantage of the expanded market.
All told, Mexican farm exports to the United States have nearly doubled from $2.7 billion in 1993, the year before NAFTA took effect, to $5.2 billion in 2001, according to the U.S. Department of Agriculture.
Winners include vegetable exporters such as Frigorizadas La Huerta SA, which ships frozen peas, broccoli and other goods.
Some cattlemen have prospered by focusing on raising calves, an activity in which they are competitive. They ship the calves to the United States, where U.S. ranchers are better at fattening them up.
But the list of losers is probably longer. U.S. farm exports have gone from $3.6 billion in 1993 to $7.9 billion in 2001, making Mexico the third-largest foreign market for U.S. farmers, behind Japan and Canada.
Potential victims in Mexico next year include pork and poultry producers and dairy farmers. Grupo de Economistas y Asociados, a Mexico City consulting firm, estimates that 500,000 people could be directly affected.
The story is similar in basic grains such as wheat, corn and rice. There, U.S. subsidies have helped American farmers gobble up market share in Mexico in recent years.
Some critics say the rise in exports is Mexico's fault, because it had years to transform its farm sector after NAFTA took effect in 1994.
Juan Millan, governor of the major agricultural state of Sinaloa, said that NAFTA, along with the Mexican government's "abandonment" of farmers, would lead to "massive immigration to cities and to the United States" and "pain, sadness and frustration among almost 25 million Mexicans who survive in the rural sector."
The rural population has been shrinking but still accounts for nearly 25 percent of the country's 100 million people. When NAFTA began, there were great expectations that it would force a modernization of rural Mexico, bringing greater technology and investment to fields where many workers still use only a sharp machete and bare hands. In some cases that has happened; Mexican tomatoes, mangoes, watermelon and other fruits and vegetables are moving north across the border at record rates.
But for the majority of the Mexican agricultural sector, the promised increase in prosperity and efficiency has not arrived.
"The farms are not in the condition we expected eight years ago," said Jaime Rodriguez Lopez, head of the agriculture committee in the lower house of the Mexican Congress. "Mexico's agriculture sector is not ready to face NAFTA's challenges."
Experts attribute the problems in the countryside to a number of structural flaws. Seventy percent of farmers have fewer than 12 acres, preventing them from achieving economies of scale. Few have the know-how to modernize. Many farms are communally owned. And government officials have done little to promote lasting development.
Also, the birthrate in the countryside is far higher than in the cities.
"Mexico had eight years to adjust its rural production system and prepare for the opening in 2003," columnist Sergio Sarmiento wrote in the Mexico City newspaper Reforma. "We didn't do anything."
It's too soon to tell whether the flow of migrants to the United States will increase substantially from its level of about 300,000 per year. But many Mexicans seem to be making plans.
Antonio Salazar, 57, recently left his 5 acres of corn, broccoli and wheat in the northern state of Durango. He headed for the United States on a tourist visa to see his son, daughter-in-law and newborn grandson.
He had planned to stay a week or two. Then he saw the fields of grapes, cotton and sugar beets where his son works, in the heart of California's San Joaquin Valley.
"After the holidays, I'm going back to California," he said. "Maybe I'll rent my land (in Durango) to someone with more faith and patience. But I see no future here."
And the USA is supposed to be the back office and brains of globalization? Programming jobs are moving to India. Dell outsources some customer support to India where my sister had a linguistic misunderstanding that kept her Dell computer inoperable. So she phoned again and got someone in India who could communicate understandably (I am not anti India)
In the interest of raising the wages of the rest of the world, the US was going to outsource for everything.
What this would amount to was a bucket full of water (us), being connected to an empty barrel (being the rest of the world) by a small hose.
The freetraders promised a half full bucket and a half full barrel when the water flowed. I invisioned an empty bucket and a smattering of water on the bottom of the barrel.
I went round and round with lunatics on this topic. What it all boiled down to was this nervana that was supposed to develop. All manufacturing jobs would wind up information technology jobs. Oh it was going to be grand. Well, dot com crashed and H1-Bs became the new battle cry. Plenty of information technology folks went on unemployment because they weren't trained in the right language etc. All those manufacturing employees that were supposed to be retrained weren't.
We now have tens of millions of jobs shipped overseas. We have tens of millions of illegals flooding our nation. Each has caused massive downward pressure on wages. Those who have been displaced and found work now have two or three jobs to make ends meet.
In light of this I have seen folks lament the slouches who have had to file for bankruptcy. I've seen it all in my lifetime. This really takes the cake.
You have mentioned the outsourcing to India. I was aware that a lot of dictation was taking place from the US to India. I may be wrong, but I believe that some medical record transcriptions are now taking place on an international basis.
We have displayed an incredible willingness to savage any industry possible in the interest of saving a buck. It's amazing to me that anyone stateside makes more than $2.00 an hour these days. If the powers that be are lucky, we'll get there in the next few years. When we do, who is going to be able to afford the trash we're importing?
The food we import from Mexico is grown using methods outlawed in the United States. Strawberries imported to the US were found to have used waste-water that would never have been allowed in the US. The same folks that whine mercilessly when our citizens have to work under conditions far superior to those in Mexico, could care less if their employees are abused at will. I just don't get it. Everything is turning into the cheapest and least safe product for our populace.
It's basicly open season on US citizens. I've felt that way for a long time. I don't know how much more obvious it could be. Our hospital care is on life-support due to the freebies given to tens of millions of illegals. We can't afford to build enough schools, but millions of children to illegal aliens are pouring into them. We can't afford a college education but illegals can get the same in-state discounts a citizen can. All this is well known, but the government won't stop it. And in fact it's intent on opening the borders and increasing it ten-fold.
Oh yes, be sure not to mention this to die-hard supporters.
The Rockefeller family donated the high-priced real estate in NYC for the construction of the United Nations Building. Hmmmmmm
If not the exact numbers, the principle has to be true. Displaced Mexican farm workers will try to go where the jobs are. Some will surely try non-farming jobs in Mexico. But a lot will just look across the border where the farms are profitable and looking for workers.
One of the unappreciated aspects of free trade is that it treats labor like any other commodity. You can't have truly free trade by letting manufactured goods ignore borders and tariffs, but blocking labor at the border. The labor needs to be able to flow as freely as any other commodity.
The obvious problem this creates is that labor is not just like any other commodity. "Labor" is a function performed by human beings. The two are not seperable, even though 90 percent of economic analysis (and 99.9 percent of popular economic analysis) will entirely ignore every human aspect of the laborer other than his labor.
What that means is cultural and political concerns may be in conflict with those of free trade at various places and times. In such cases, something will have to be compromised. Pure free traders are likely to find cultural and political hits acceptable to a much larger degree than those who care more deeply about culture or politics than free trade. But the frequent lie is that this conflict does not exist. It does.
Except it makes no sense that we're exporting all the low-skilled jobs and at the same time importing all the low-skilled labor. Also the American taxpayers are having to pay the costs of supporting all the American displaced NAFTA workers and we pay to support all the Mexican displaced NAFTA workers also.
To really have labor flowing freely, we need to cut minimum wage to $0.40 an hour like they have in Mexico and eliminate all welfare and safety net programs. NAFTA is a joke with us having to provide the safety net for both countries.
Incidentally your statement "Except it makes no sense that we're exporting all the low-skilled jobs and at the same time importing all the low-skilled labor," is wrong. We're exporting low wage manufacturing jobs, but we're keeping low wage agricultural and service jobs.
If NAFTA was working, the displaced campesinos would be going into the low wage manufacturing jobs but instead are headed to the US ---whether or not there are jobs here for them. American farms don't need much labor ---certainly not 5 million more displaced Mexican campesinos, our farm efficiency is due to machines ---and what Mexico should be doing is importing our machines and importing our labor so they can learn how to farm efficiency. What happens is a Mexican campesino comes here with no skills at all, if they're bright they'll learn to drive a tractor and other farm machines and will never go back home where the work is all manual and difficult. Mexico ends up even more backward than it already was. We don't need much labor, we need more machines.
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