The Effects of NAFTA on Mexican Agriculture
Cons of NAFTA for Mexico
- As commercial farmers shifted to producing export oriented crops, subsistence farmers faced great difficulty as large commercial farms thrived.
- Commercial farms found more efficient ways to grow their crops through mono-cropping or with the help of sophisticated technology not available to poor farmers.
- Many small farmers lost their farms because they could not sell their product at such a cheap price.
Pros of NAFTA for Mexico
- Exports increased exponentially.
- With increased competition, prices for many things, namely food, went down considerably.
- With increased trade options in the newly formed free market, Mexico was able to lower the prices of their products to that of the world market.
- Growing pains were expected, but it was believed Mexico would benefit from lower prices and increased productivity in the future.
Mexican Expectations of NAFTA
Early Stages of NAFTA
- The 1980s were referred to as the "lost decade" in Mexico. Poverty, slow growth and the debt burden had a firm grip on Mexico.
- By signing a free trade agreement, Mexico could likely lower their rates of inflation, increase trade possibilities, create manufacture jobs, and increase interest of foreign investors.
- Mexico ultimately wished to change their reputation from that of a decaying country, to a thriving, developing country.
NAFTA Past, Present, Future
- North American Free Trade Agreement (NAFTA) was a free trade agreement between Mexico, Canada and the United States signed on January 1st, 1994
- The signing of NAFTA signaled the creation of a formal trading bloc between the three countries.
- As a result, the economic dominance of the United States continued as many farms were lost in the Mexican country side
More Effects of NAFTA
- On the same day NAFTA was signed, Zapaistas launched an assault on the Mexican government
- Under new laws, protected Indian communal landholdings could now be sold to private investors.
- In 2012, Mexican farms took to the streets in protest against Agribusiness giant Monsanto
- The future for Mexican farmers is up in the air, with the continued increase in productivity by commercial farms, small farmers must create new opportunities or find new jobs.
Dumping Margin Under NAFTA
- As many as 800,000 workers lost their agriculture related jobs due to increased efficiency and use of new technologies
- Mexico's per capita fell sharply in 1995 and hovered around 28% of those from the United States.
- However, since 1996 rates of extreme and moderate poverty have steadily decreased.
- The general public have positive feelings about NAFTA