Wednesday, April 2, 2014

The Reality of Free Trade in Mexico

by Sophie Nikitas

The Mayans had a myth to explain the creation of humans: the gods tried three times to make the first human. The first time, they tried to make it out of clay; the next time, out of wood, but neither was satisfactory to them. So they tried one more time; this time, they used corn. Finally they succeeded in creating a human who could work the land and worship the gods. This story is just one example of the importance of corn—not just as food, but as an integral part of Mexican culture and identity. 

Mexico is home to around 60 varieties of native corn,
which are under threat from GMO's. Transnational
companies like Monsanto are favored under NAFTA.
I witnessed this importance first-hand when I traveled to Mexico in January with Witness for Peace. I went as part of a program that examined how free trade between Canada, the US and Mexico affected the region of Oaxaca in particular. My colleagues and I learned about the effects of NAFTA, particularly via trade between US and Mexico, and how different those effects were from what the US government portrays them to be. In particular, I saw how free trade is affecting the production of, and access to corn

The US government largely focuses on the benefits stemming from the free trade agreement. For example, one of NAFTA's main goals was originally to improve the Mexican economy by giving farmers, a large portion of the workforce, the opportunity to sell their goods on a larger, international market. Tied in with that was the aim to encourage Mexico's "development", particularly by giving agricultural workers access to affordable crops and allowing them to work in more lucrative and less labor-intensive sectors of the economy. In 1994, with those goals in mind, the US, Canadian and Mexican governments lifted tariffs on non-domestic products sourced from the other countries, and free trade between the three began. 

This year marks the 20th anniversary of NAFTA. Mexico is certainly different from before the agreement, but not in the way that was anticipated. In reality, NAFTA's policies have made Mexico more dependent on the economy and resources of the US, and the result is that many of the Mexicans who were predicted to benefit have become less self-sufficient than before. Corn farmers have been particularly hard-hit. Despite being considered "poor" by the Mexican and US governments, mostly due to the lack of expendable capital, Mexican corn farmers were actually fairly self-sufficient before the agreement. Their ability to grow their own food provided a certain degree of food security and control over the local markets. However, policies aimed at promoting "development" have made it more challenging for many farmers to grow corn and other essential crops, in favor of promoting other sectors of work. 

In order to encourage the "development" (and I keep putting this word in quotes because US standards for development are not synonymous with improvement in food security and general quality of life), the Mexican government began importing cheap corn from the US in order to push corn farmers to seek work in other sectors. It's important to note that, although NAFTA includes provisions against government subsidies of crops, which would disrupt the price competition between producers across the countries involved, the US continues to subsidize the production of corn. This allows US farmers to export their corn to Mexico at such low prices that Mexican farmers cannot compete, and, as a result, must find a different source of immediate income. 

The option that the Mexican government presented was encouraging farmers to move to cities for work, particularly in "maquiladoras". Maquiladoras are factories within "Free Trade Zones" that provide cheap labor for companies operating transnationally. Despite the supposed benefits of this type of work, maquiladoras provide neither the financial or bodily security that many Mexican farmers had when they produced their own crops.

Maquiladoras multiplied in Mexico with NAFTA. They are criticized for serious environmental pollution, dangerous working conditions, low pay, and discriminatory practices like only hiring young women, forcing them to take pregnancy tests (and then firing them if they're positive), and preventing union organizing.

In order to get contracts with large companies, maquiladoras must offer the lowest production prices. This is called "race to the bottom", when factories try to offer prices low enough that companies will use them instead of sourcing their manufacturing to factories in India, for example. Because of this desire to cut costs, maquiladoras are well-known for their dangerous conditions. Employees often work long hours  without proper training, equipment or protection from chemicals or machines that they use. On top of that, they receive a fraction of an equivalent US salary for their work. 

NAFTA's defenders argue that maquiladoras have created 800,000 new jobs for "poor" Mexicans, but in reality maquiladoras are a much worse option than typical corn farming. The lack of safe conditions, financial security and the autonomy to grow and access one's own food are not part of public statements, nor the two million agricultural jobs that were lost in order to encourage work in maquiladoras. As a result, there are many people in Oaxaca, as well as throughout Mexico, fighting against these policies.

One of several fair trade certifications.
Our group met with several Oaxacan cooperatives: one that I learned the most from was called Michizá. This cooperative works with indigenous coffee farmers in order to sell their products on the fair trade market, both in Mexico and the US. One of their main barriers, they told us, was the cost of obtaining a free trade certificate. When the goal is to get the profit to the producers, the cost of obtaining fair trade certification for US markets can impede that process. As a result, it is much more expensive to sell that coffee in the US, where there is more demand for coffee than in Mexico, where it is often less expensive.

The most striking thing about the presentation was the recurring theme of how difficult it was for farmers to get compensated for their work when they sold on the international market, even though that route is so encouraged and supposedly easier under NAFTA. This seems to be the biggest challenge in free trade: expanding opportunities and new markets for producers while ensuring that they reap those benefits. I think that working within larger systems, like corporations and larger fair trade certification agencies, makes it easier to forget who produced the product we are consuming. On the other hand, working on a smaller scale—maybe local, maybe a smaller company—can ensure that consumers like me know where our products are coming from, and that, just as I am getting something from the producers, they are receiving back from me. 

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