When American companies cannot compete against imports that they believe are being "dumped" at below-market prices, they are quick to demand remedies from Washington, usually in the form of punitive tariffs. These days, the alleged culprit is often China.
But try looking at things from south of the border and the picture shifts. There, the culprit is just as likely to be the United States, particularly when it comes to agriculture.
A new paper from Timothy A. Wise at the Global Development and Environment Institute at Tufts concludes that America's generous subsidies allow farmers to sell their products to Mexico at below-market prices. The cost to Mexican farmers, he estimates, was $12.8 billion from 1997 to 2005. Corn farmers fared worst; American subsidies cost them $6.6 billion.
Despite protests by weathered farmers who periodically march down Mexico City's main avenue, the government has not responded with tariffs.
Quite the contrary, under the North American Free Trade Agreement, the Mexican government quickly opened up to American agricultural imports to take advantage of lower food prices. Mexican agricultural subsidies - yes, Mexico also has them - have been channeled to favor large well-capitalized farmers, most critics agree, at the expense of peasant farmers.
What peasant farmers have received has gone toward compensating for United States dumping, rather than helping farmers become more competitive.
Dumping on Mexico
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Dumping on Mexico
By Elisabeth Malkin
New York Times, December 15, 2009
Straight to the Source
