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Mexican Farmers Hammered by NAFTA

Mexico's poor farmers hurt by NAFTA, economist says
By Lourdes Medrano, Arizona Daily Star
Wed Aug 31, 4:40 AM ET

The North American Free Trade Agreement may have boosted big business, but it has had a disastrous effect on Mexicans, a Chiapas economist said.

"There have been losers, and the big losers are the Mexican people," said Miguel Pickard, one of the founders of the Center for Economic and Political Research for Community Action. Known by its Spanish acronym of CIEPAC, the nonprofit organization is based in San Cristo'bal de las Casas, Chiapas. Today, Pickard will speak in Tucson about how free trade policies have affected the Mexican population, particularly indigenous communities. His talk is sponsored by the immigrant-advocacy groups No More Deaths, Samaritans and the Coalicio'n de Derechos Humanos.

The free-trade agreement, which ended tariffs on most goods traded within the United States, Mexico and Canada, "is not the success story we've been told," Pickard said in an interview.

"Mexico's getting poorer. The purchasing power of a Mexican wage is falling. The concentration of wealth among the very rich is increasing, and there are no jobs being created," the economist added.

Not coincidentally, he said, a growing number of rural Mexicans have been forced to migrate to the cities or to the United States since NAFTA took effect in 1994.

David Gantz, associate director of the National Law Center for Inter-American Free Trade, agreed that NAFTA has hurt small farmers in Mexico. But he also said migration from rural areas to cities is the predictable result of industrialization in any part of the world.

And while NAFTA can partly be blamed for Mexico's problems, Gantz said other factors - including a demographic boom that added scores of workers to a weak economy - also come into play.

"My guess is that the situation would be worse off without NAFTA," the University of Arizona law professor added. "But I wouldn't say that it has been this glorious, unqualified success in producing jobs."

Demetrios Papademetriou, president of the Migration Policy Institute in Washington, D.C., wrote in a 2003 report that a combination of economic and social forces - including a high demand for workers in the United States in the late 1990s, Mexico's peso devaluation in 1994 and a history of migration between the two countries - eclipsed NAFTA's potential to curb illegal immigration by encouraging job growth in Mexico.

But NAFTA also has served to stabilize Mexico's middle class - "the seedling around which development can happen," Papademetriou said in a phone interview Tuesday.

Pickard said Mexican farmers who grow corn, beans and wheat for food and some extra cash are among those hit hardest by NAFTA because they can't compete with large U.S. grain producers who are government-subsidized.

NAFTA also has forced farming families to develop a survival strategy, which includes sending one or two family members to the city or to the United States, he said.

Pickard said that in Chiapas alone, the lack of jobs pushed about 300,000 people out of the state between 1994 and 2003. Some went to work in large Mexican cities, others headed across the northern border.

The exact number of people who ended up living illegally in the United States is hard to pinpoint, he noted, but the money they send home to Mexico each year speaks volumes.

Last year, Mexican expatriates sent $16.7 billion to their country - $500 million to Chiapas.