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posted by janrinok on Friday December 30 2016, @03:17PM   Printer-friendly
from the optimism-is-wonderful dept.

A group of Mexican farmer leaders and academics believe that U.S. President-elect Donald Trump's pledge to renegotiate the North American Free Trade Agreement, or NAFTA, will be a good opportunity to review areas of the treaty that are not favorable to the sector in Mexico.

Experts say that after 23 years of its implementation, NAFTA, signed by Mexico, the United States and Canada in the early 90s, has helped dismantle Mexico's agricultural production system through neoliberal policies that have left millions of poor farmers without state support and have increased the country's food dependency on aboard, La Jornada reported Tuesday.

Since his presidential campaign, Trump has vowed to force Canada and Mexico to negotiate the trade deal saying it has been detrimental to the manufacturing industry in the United States, sending shocking waves of uncertainty for the already weakened Mexican economy.

[...] In the years that have followed the NAFT signing, the Mexican government has sold itself as a pro-business and lower-cost alternative for U.S. companies and in the process became a manufacturing powerhouse of cars, computers, aerospace technology and televisions.

However, the modernization process also helped dismantle the national agricultural system, which has practically disappeared, according to analysts and producers.

Source: teleSUR


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  • (Score: 1, Interesting) by Anonymous Coward on Friday December 30 2016, @06:54PM

    by Anonymous Coward on Friday December 30 2016, @06:54PM (#447549)

    Does anyone have a good citation to the changes in Mexican economy after NAFTA? Here is one possibility,
          http://www.cfr.org/trade/naftas-economic-impact/p15790 [cfr.org]

    After the long intro is this section (the original has many reference links in it):

    How has it affected the Mexican economy?

    NAFTA gave a major boost to Mexican farm exports to the United States, which have tripled since NAFTA's implementation. Hundreds of thousands of auto manufacturing jobs have also been created in the country, and most studies have found (PDF) that the pact had a positive impact on Mexican productivity and consumer prices.

    The pact was the continuation of a decade of economic liberalization that saw the country transition from one of the world’s most protectionist economies to one of the most open to trade. Mexico had reduced many of its trade barriers upon joining the General Agreement on Tariffs and Trade (GATT), the precursor to the WTO, in 1986, but still had a pre-NAFTA average tariff level (PDF) of 10 percent.

    Mexican policymakers saw NAFTA as an opportunity to both accelerate and “lock in” these hard won reforms to the Mexican economy. In addition to liberalizing trade, Mexico’s leaders reduced public debt, introduced a balanced budget rule, stabilized inflation, and built up the country's foreign reserves. Thus while Mexico was hard hit (PDF) by the 2008 U.S. recession due to its dependence on exports to the U.S. market—in 2009 Mexican exports to the United States fell 17 percent while its economy contracted by over 6 percent—its economy was able to bounce back relatively quickly. Mexico returned to growth in 2010, its GDP expanding over 5 percent, and subsequently falling to around 2 percent in 2014 and 2015.

    But Mexico's NAFTA experience has suffered from a disconnect between the promises of some of its supporters—that the pact would deliver rapid growth, raise wages, and reduce emigration—and the deal’s more mixed outcomes. Between 1993 and 2013, Mexico's economy grew at an average rate of just 1.3 percent a year during a period when Latin America was undergoing a major expansion. Poverty remains at the same levels as in 1994. And the expected “wage convergence” between U.S. and Mexican wages didn't happen, with Mexico's per capita income rising at an annual average of just 1.2 percent in that period—far slower than Latin American countries such as Brazil, Chile, and Peru.

    Mexican unemployment also rose, which some economists have blamed on NAFTA for exposing Mexican farmers, especially corn producers, to competition from heavily subsidized U.S. agriculture. A study led by CEPR economist Mark Weisbrot estimates that NAFTA put almost two million small-scale Mexican farmers (PDF) out of work, in turn driving illegal migration to the United States. (Migration to the United States, both legal and illegal, more than doubled after 1994, peaking in 2007. However, the flow reversed after 2008 as more Mexican-born immigrants began leaving the country than arriving. Experts attribute this to stricter border enforcement, changing demographics in Mexico, and the combination of fewer available jobs in the United States along with more in Mexico.)

    Many analysts explain these divergent outcomes by pointing to the “two-speed” nature of Mexico's economy, in which NAFTA drove the growth of foreign investment, high-tech manufacturing, and rising wages in the industrial north, while the largely agrarian south remains detached from this new economy. As University of Pennsylvania economist Mauro Guillen argues, Mexico's rising inequality stems from NAFTA-oriented workers in the north gaining much higher wages from trade-related activity.

    Ultimately, many experts caution, Mexico’s recent economic performance has been affected by many non-NAFTA factors. The 1994 devaluation of the peso drove Mexican exports, while competition with China’s low-cost manufacturing sector (PDF) likely depressed growth. Unrelated public policies, such as land reform, made it easier for farmers to sell their land and emigrate. As UCSD’s Hanson has argued (PDF), Mexico’s struggles have largely domestic causes: poorly developed credit markets, a large and low-productivity informal sector, and dysfunctional regulation.

    Article also has sections on NAFTA effect on Canada and USA.

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  • (Score: 0) by Anonymous Coward on Friday December 30 2016, @07:04PM

    by Anonymous Coward on Friday December 30 2016, @07:04PM (#447554)

    TLDR: NAFTA resulted in dumping of corn on Mexican market, destroying profit margins for farmers, sending them north to make ends-meet.

    Whoever agreed to NAFTA on Mexican side was a fuckin moron, or was bribed to do so...

    • (Score: 0) by Anonymous Coward on Friday December 30 2016, @07:11PM

      by Anonymous Coward on Friday December 30 2016, @07:11PM (#447562)

      Parent source says:
      > NAFTA gave a major boost to Mexican farm exports to the United States, which have tripled since NAFTA's implementation.

      Didn't you mean?
      > TLDR: NAFTA resulted in dumping of corn on Mexican market, destroying profit margins for SOME farmers...