How beer explains 20 years of NAFTA’s devastating effects on Mexico
Timothy A. Wise, Global Post
January 2, 2014 07:00
NAFTA produced a devastating one-two punch. For the first 10 years, the flood of US exports of corn, wheat, meat and other staples drove Mexican producer prices well below the costs of production.
By the mid-2000s, Mexico was importing 42 percent of its food, mostly from the United States. Corn import dependence had grown from 8 percent before NAFTA to 32 percent. Mexico was importing nearly 60 percent of its wheat where before it had imported less than 20 percent.
Import dependence was more than 70 percent for soybeans, rice and cotton.
Then came the sucker punch. In 2007, international prices for many staple crops doubled or tripled, and so did the cost of importing them. Countries like Mexico that had gotten hooked on cheap imports paid a heavy price. Call it the Age of Dependency.
US policies had as much to do with these high and volatile prices as they had with the Age of Dumping. Now, instead of price-depressing surpluses caused by US agricultural policies, US subsidies and incentives were diverting 40 percent of US corn – 15 percent of the global supply – into ethanol production.
This drove up the price of corn, but also prices for related crops, like soybeans and wheat, and the livestock products that had relied for so long on cheap feed.
(T)he beer sector is a perfect example of the kind of integration NAFTA can achieve.
“Look, Mexico’s even importing the barley malt from us to make its beer!” I said.
I took another sip.
“So Mexico’s agricultural contribution to its beer exports is … what?” I asked.
Here is a case where NAFTA has gotten the United States to open its market to something of value that Mexico can export, and Mexico can’t even capture the value from it. The industry’s growth benefits US barley growers and US malt makers. Mexico can’t even import the barley and make the malt themselves.
So the country is basically a maquiladora for beer bottling. I guess Mexico contributes the water. Which it doesn’t have enough of.
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(note: David Bacon is an award-winning photojournalist, author, and immigrant rights activist who has spent over twenty years as a labor organizer.)
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