Timothy Wise: Mexican agriculture was undermined by NAFTA and companies like Smithfield
PAUL JAY, SENIOR EDITOR, TRNN: Welcome to The Real News Network. I’m Paul Jay, coming to you from Tufts University in Boston. In the recent US midterm elections, one of the hot-button issues in many parts of the country was the issue of undocumented workers–some people call [them] illegal immigrants. What effect does it have when people, because of their status, are willing to work for sometimes even below minimum wage? But the question that rarely gets asked in this debate is: why are so many people from south of the border here? And what happened to the economies of countries like Mexico? And did in fact US policy have something to do with it? Now joining us to talk about that question is Timothy Wise. He’s director of the Research and Policy Program at the Global Development and Environment Institute at Tufts University in Boston. So why do so many people head north looking for work?
TIMOTHY WISE, TUFTS UNIVERSITY, BOSTON: Well, Paul, as I think it’s pretty well known now, the economies of some of our main trading partners, such as Mexico, have not fared as well as people had hoped under trade agreements like the North American Free Trade Agreement, now 16 years in operation. The job creation that took place in Mexico under that model, as we showed in a recent Carnegie Endowment report, was disappointing, to say the least, and most economists recognize that.
JAY: Now, we were told that the thing holding Mexico back was too much government, public ownership, too much government regulation. So free up the economy, get the government out of the way, and productivity would go up, and prosperity. Especially with Mexico having so much oil, there would be great prosperity. And that would be the solution to the Mexican economy’s problems.
WISE: No, beyond that. They promised–the promise of NAFTA was that Mexico would be able to export goods and not people. That was the explicit promise at the time of NAFTA. And it just hasn’t been true. Manufacturing, which saw huge growth in the initial years of NAFTA, actually generated very few jobs, because it destroyed as many–almost as many manufacturing jobs as it created.
WISE: Well, by foreign companies coming in and out-competing, or buying up, or bringing their products in and putting local firms out of business. So that lost jobs. And then the new firms that came in created some new jobs. But my area is agriculture, and that’s the area where–even if there have been small gains in employment in manufacturing and in the service sector, the agricultural sector’s just been decimated. NAFTA’s liberalized trade, which allowed US goods, mainly meats and grains, to flow without tariff protection into Mexico and compete directly with producers who are producing things like corn not just for the big global marketplace but for their own consumption.
JAY: So tell us the story of corn. How did that–what’s the mechanism of that? And what were the consequences?
WISE: Sadly, NAFTA included a transition period for the liberalization of corn that the Mexican government unilaterally chose not to follow. So corn tariffs, which the Mexican government had used fairly consistently to protect their corn farmers from cheaper corn coming from the US, were eliminated very quickly after NAFTA, within two years of NAFTA. Corn flooded in. Its–imports increased over 400 percent in Mexico of US corn, prices went down 66 percent in the 16 years of NAFTA. And the impact on Mexican producers was obviously devastating.
JAY: ‘Cause the argument would be, what’s wrong with cheaper food in Mexico?
WISE: Well, cheaper food in Mexico is fine if that’s translating into cheaper food. The only evidence that there’s really been cheaper food in Mexico from that policy is that since it’s mainly fed to animals, that pork might have gotten a little cheaper for some urban consumers. But tortillas didn’t get cheaper, which is the staple of the Mexican diet. And, of course, the farmers who eat what they grow in addition to selling what they grow were devastated. The evidence is that 2.3 million people left agriculture in Mexico in the time since NAFTA. And that actually hides an even worse story. Some 5 million so-called unpaid family farm members left the farm. They didn’t give up their farms, ’cause their farms are a really valuable asset, often the only asset they have. But that’s the flow that got pushed into the undocumented migrant stream, those 5 million people who couldn’t make a living off their family farms anymore.
JAY: Now, I remember in 1991, I stood on the Tijuana border on the Mexican side, looking north. It was about five or six o’clock in the evening. And there were about 300 people lined up on this side of me, another 300 lined up on this side of me. People were selling popcorn and candy and tortillas, and it was like a festival, waiting for the sun to go down, where something close to, I think, 1,000 people were all going to just go head into California, and waiting on the other side to stop them was nobody. So talk about the role of–the extent to which this–people were not just forced north because of a destroyed agriculture in Mexico, but more or less welcomed to come north, even though supposedly it was illegal.
WISE: Well, I think that’s obviously a policy that–in the beginning there was a more routine and regular and almost wink-wink accepted policy of illegal but tolerated migration. That changed significantly over the course of the NAFTA period, and particularly after 9/11, when security concerns became paramount and securing the borders became the order of the day. The militarization of the border since then has resulted in making that journey much, much more perilous, much more cracked down on. And, you know, the deaths along the border reach record proportions every year [inaudible]
JAY: But hundreds of thousands if not millions of people that came during the more laissez-faire period were virtually invited to come, to all real intents and purposes, and have been working here for decades. And now there’s a conversation about because they’re not documented they should be thrown out. I mean, it boggles the mind that people don’t get why and how people are here.
WISE: Well, right. And in Mexico it of course boggles the mind that trade in everything was liberalized, the flow of goods, the flow of services, the flow of capital, but not the flow of people. It’s the only thing that wasn’t liberalized. And with the failure of job creation in Mexico, particularly the devastation in agriculture, the flow happened anyway. It happened. We criminalized it and began to make that a much more–take a much more punitive look at that approach to that on the part of the US government, with huge cost to human life, just the deaths on the border, to breaking up families. It used to be that with a seasonal flow of migrants, family members would come work the fields in California or wherever and go back home. Now families are permanently broken up because it’s too risky to go back and forth and back and forth. They come and they stay. It’s too risky to bring their family members. So it’s devastating to families as well.
JAY: So talk a little bit about a particular company that seems to be on–play both sides of the border and done fairly well, Smithfield, which is one of the largest pork producers and brings us lovely pork sausages–and swine flu, to boot. How does this mechanism help them?
WISE: I was asked once at a conference, well, if the farmers in the US and farmers there don’t win from NAFTA, who does? And I said, take Smithfield, please, because they benefit not only from US agricultural policies but from labor policies, environment policies, immigration policies, and trade policies. Obviously, NAFTA opened the border to their pork so they could sell their pork cheap in Mexico, and they did. Pork exports increased 700 percent from the United States to Mexico [sic]. But they were getting all their feed grains cheap at a discount rate because of US agricultural policies which created overproduction and forced down corn and soy costs. So that’s 65 percent of your operating costs if you’re fattening hogs. And so they were getting cheap feed for their hogs. They–NAFTA liberalizes investment, so they can invest their own capital to expand their operations in Mexico, and they become what is now the biggest pork producer in Mexico, on plants like that one in Veracruz that is suspected of having some relationship to the swine flu epidemic. What are they feeding their hogs down there? They’re feeding the imports of corn and soy that come in liberalized under NAFTA and come in below the costs of production. So, again, it’s a subsidy to–an implicit subsidy to Smithfield down there. No environmental regulations are enforced either in the United States or in Mexico for these very polluting industrial hog operations. And then, as if that’s not enough, all the people pushed out of jobs in Mexico in corn, in soy, in pork, all those small-scale producers who can’t compete with the imports, or with Smithfield directly, need to look for work. And where do they find work? Well, some of them find them at the Veracruz facility in Mexico of Smithfield, and some of them come across the border and work at the Tar Heel plant in North Carolina.
JAY: Smithfield plant.
WISE: The Smithfield plant. And that makes–that, with a lax enforcement of labor laws, is yet another way that policy supports this kind of playing–what amounts to, in the case of Smithfield and in the US, a playing off of immigrant workers against workers born here, undocumented immigrants against documented immigrants. And that stalled a unionization effort at the Tar Heel plant for years. Fortunately, their persistence and a massive corporate campaign led to a union victory there in 2008, a historic union victory.
JAY: Thanks for joining us.
WISE: My pleasure.
JAY: And thank you for joining us on The Real News Network.
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