NAFTA Devastated Mexico's Rural Sector And Increased Mexican Poverty

citizen |  The North American Free Trade Agreement (NAFTA) was sold to the people of all three countries with grand promises. Mexicans were promised NAFTA would raise their wages and bring Mexicans’ standards of living closer to the United States and Canada. Instead, after 25 years, real wages in Mexico are down from already low pre-NAFTA wages, two million Mexicans engaged in farming lost their livelihoods and lands, tens of thousands of small businesses have gone bankrupt as American big-box retailers moved in, and poverty remains widespread. And, Mexican taxpayers have paid foreign investors more than $204 million in compensation following Investor-State Dispute Settlement attacks.

Prior to NAFTA, 21.4 percent of Mexico’s population earned less than the minimum income needed for food, a share that has barely budged in the 25 years since NAFTA’s implementation. Today, over half of the Mexican population and over 60 percent of the rural population still fall below the poverty line, contrary to the promises made by NAFTA’s proponents. On the 10-year anniversary of NAFTA, the Washington Post reported: “19 million more Mexicans are living in poverty than 20 years ago, according to the Mexican government and international organizations.”

Before NAFTA, Mexico only imported corn and other basic food commodities if local production did not meet domestic needs. NAFTA eliminated Mexican tariffs on corn and other commodities. NAFTA terms also required revocation of programs supporting small farmers. But NAFTA did not discipline U.S. subsidies on agriculture. The result was disastrous for millions of people in the Mexican countryside whose livelihoods relied on agriculture. Amid a NAFTA-spurred influx of cheap U.S. corn, the price paid to Mexican farmers for the corn that they grew fell by 66 percent, forcing many to abandon farming. From 1991 to 2007, about 2 million Mexicans engaged in farming and related work lost their livelihoods. Mexico’s participation in NAFTA was conditioned on changing its revolutionary-era Constitution’s land reforms, undoing provisions that guaranteed small plots (“ejidos”) to millions of Mexicans living in rural villages. As corn prices plummeted, indebted farmers lost their land, which newly could be acquired by foreign firms that consolidated prime acres into large plantations.

According to a New Republic exposé: “as cheap American foodstuffs flooded Mexico’s markets and as U.S. agribusiness moved in, 1.1 million small farmers – and 1.4 million other Mexicans dependent upon the farm sector – were driven out of work between 1993 and 2005. Wages dropped so precipitously that today the income of a farm laborer is one-third that of what it was before NAFTA.” The exposé noted that, as jobs and wages fell, many rural Mexicans joined the ranks of the 12 million undocumented immigrants competing for low-wage jobs in the United States.