The United States and Mexico are fighting a series of agricultural disputes a decade after signing the North American Free Trade Agreement, underscoring the difficulty and sensitivity of opening farm trade through negotiated agreements.
Agriculture also is the most contentious issue in global trade talks, pushing a meeting this month in Cancun, Mexico, toward collapse.
“Having just returned from the recent World Trade Organization ministerial talks in Cancun, and having witnessed their collapse, I am deeply concerned about the direction of global trade in agriculture,” Sen. Max Baucus, Montana Democrat, said yesterday at a Senate Finance Committee hearing that focused on Mexico.
Difficulties with U.S.-Mexico trade show what can happen when U.S. exports successfully compete in overseas markets, and what concerns other nations when they negotiate trade deals.
Just by the numbers, agricultural trade under NAFTA has been a marked success. U.S. farm exports to Mexico were $7.2 billion last year, nearly doubling from $3.6 billion in 1993, according to U.S. Commerce Department data. Imports from Mexico surged to $5.5 billion from $2.7 billion in the same time frame.
But U.S. exports with the sharpest growth have met increasing resistance from Mexican producers and sometimes the Mexican government. In 10 years, U.S. corn exports to Mexico are up 750 percent; beef, 430 percent; pork, 188 percent; rice, 100 percent; and apples, 50 percent. Corn, rice, pork, beef and apples all topped a list of complaints from U.S. farmers about Mexican trade barriers yesterday.
“Recent events give us some pause and make us question the long-term stability of the Mexican market,” said Ron Litterer, an Iowa corn farmer and an Iowa Corn Growers Association board member.
The surge of U.S. corn sales, fueled in part by government subsidies, has pushed down prices for the commodity, making it harder for Mexican farmers to earn a living and causing many to leave their land.
Mexico’s President Vicente Fox responded this spring with an agricultural accord that limits imports of white corn. U.S. growers are worried that their main product, yellow corn, would be next.
“If the underlying cause of farmer discontent in Mexico is left unresolved, we will have more significant trade disruptions in the future,” Mr. Litterer said.
Other developing nations are concerned that subsidized or more competitive farm products from the United States or other wealthy areas would disrupt their local farmers, much like Mexico’s corn farmers.
At WTO talks this month, major agricultural exporters, like Brazil, and some poorer nations demanded an end to U.S. and EU agricultural subsidies before they would consider opening their markets.
Others nations demanded special safeguards that would allow them to protect their markets if foreign products threaten local producers.
Martin Khor, director of the Third World Network, a group skeptical of free trade, said that an offer allowing such “special and differential” treatment recognizes concerns among poorer nations and could help revive the collapsed talks.
“That is something that can be done without harming U.S. or EU agriculture and can be seen as a sign of goodwill,” Mr. Khor said in a teleconference with reporters.