A consensus among farmers from all three NAFTA countries is emerging about NAFTA’s effects on the agricultural trade. While agricultural exports have increased under NAFTA, neither farmers in Canada, Mexico nor the US have reaped benefits in an increase in their standard of living. During the five years of NAFTA, US exports to Canada and Mexico grew 35%, but net farm incomes have remained the same (Menser n. pag.). In fact, 45% of US small- and medium-sized farms suffered real declines in income (Menser n. pag.). During that same period, Canadian agricultural exports to the US grew 57%, but net farm income in Canada hasn’t caught up to 1986 levels (Menser n. pag.).
Over the past five years, the worldwide US agricultural trade surplus has been growing. However, since 1993, the US agricultural surplus with Mexico and Canada has declined by two thirds under NAFTA (Menser n. pag.).
Under NAFTA, Mexican tomato imports have increased 63% (”NAFTA Woes” n. pag.). Between 1993 and 1998, over 100 Florida tomato farmers have gone out of business and 24 packing houses have closed (”NAFTA Woes” n. pag.). The loss of tomato farmers has cost Florida agriculture $1 billion (”NAFTA Woes” n. pag.). During the same period, consumer prices for tomatoes increased by 16% (”NAFTA Woes” n. pag.).
NAFTA’s prohibitions on import quotas and snap-back tariffs (tariffs that kick in when domestic producers are threatened by dumping of commodities on the US market) have made US farmers and meat producers vulnerable to floods of cheap imports from Canada. Canada’s currency has suffered a drastic depreciation of 11% over the past year, making Canadian agricultural imports much cheaper. This has hurt many US farmers, especially hog farmers who have watched hog prices fall 62% since 1997 (Barboza C4). This has been attributed in part to the influx of Canadian hogs, which have increased from a pre-NAFTA level of 670,000 head in 1992 to an enormous amount of 5 million head by the end of 1998 (C4). Yet, consumer prices for pork remain the same as they were last year, and have increased 6% in real terms since 1993 (C4).
Before the 1988 Canada-US Free Trade Agreement and NAFTA, Canadian wheat imports to the US a major wheat producer and exporter were virtually zero. Five years after NAFTA, the US is Canada’s number two export market for wheat. US imports of Canadian spring wheat increased 2,000%, to 1.45 million tons, from 1990 to 1997. The Canadian wheat flood has taken its toll on US wheat farmers, who are prevented by NAFTA from imposing new quotas, imposed on Canadian wheat in 1994, have been lifted.
The big winners under NAFTA have been large “agribusiness” companies exploiting the below-market priced cheap imports to drive down domestic commodity prices such as wheat, hogs and cattle. NAFTA’s market access provisions ensure that the US imports Canadian wheat even though US grain stocks are high (”Message Pork” 35). One observer notes the same practice with below-market priced cattle imports: “Iowa Beef Packers is bringing Canadian cattle in and using it to drive the market against our people. . . .There would be no NAFTA without multinational corporations. Somebody didn’t wake up one morning and say, Hey, let’s open the borders” (”Message Pork” 35).
Conclusion
NAFTA has not simply failed to provide some of its promised benefits, but it has led instead to unemployment, environmental devastation, and serious health problems. The few beneficiaries have been corporations who benefit from deregulation that reduces their costs and the free market that they largely control. The North American Free Trade Agreement has proved a failure and at the very least must be revised in order to compensate for the damages that have occurred. As long as economic motives are behind any legislation, people and the environment will unfortunately always be expendable. Bibliography
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