NAFTA’s Empty Promises

By BEN LILLISTON

In the early ’90s, champions of the original North American Free Trade Agreement (NAFTA) promised farmers and workers a pot of gold at the end of the rainbow. Midwest farmers would export to prosperity. Manufacturing jobs would boom. Mexico’s middle class would grow and northern migration would slow. Now we are being told new fantastical tales that Congress must approve President Trump’s new NAFTA to aid our struggling farmers.

Agribusiness and farm commodity groups are leading a well-funded lobbying blitz to gain congressional approval of the new NAFTA, officially known as the US-Mexico-Canada Free Trade Agreement (USMCA), before the holiday recess. Republican senators like Iowa’s Chuck Grassley and Jodi Ernst are parroting the urgent call that farmers need a win with the USMCA after trade disruptions with China and uncertain ethanol markets.

But what exactly is the win for farmers in the new USMCA? Nearly all tariffs for agriculture were removed under the original NAFTA. The International Trade Commission, which analyzes trade deals for Congress, projected that the USMCA would result in a slight net deficit for agriculture trade: meaning we would import slightly more than export. The small projected increase in agriculture exports – mostly dairy to Canada – would have no substantive effect on the ongoing, dramatic loss of small and mid-sized dairies in the Midwest.

Grading trade deals solely on the value of goods crossing the border has always obscured the real winners and losers. The original NAFTA, combined with the formation of the World Trade Organization (WTO) and the 1996 Farm Bill, led to the ramping up of agricultural production and an increase in agriculture exports. It also led to an almost immediate drop in commodity crop prices and farmer income. In fact, since the original NAFTA we’ve seen the steady consolidation of agribusiness firms and of farmland ownership, the loss of hundreds of thousands of small and mid-sized farms and independent ranches, and the rapid growth of large-scale concentrated animal feeding operations (CAFOs) fueled by cheap (often below cost) feed. We now have a largely integrated North American agriculture market, where young cattle from Mexico and feeder pigs from Canada routinely cross borders to be finished here. For agriculture, NAFTA’s real winners were not countries, but global agribusiness firms like Cargill, JBS, Tyson and Smithfield that operate in all three countries.

Mexican and Canadian farmers have also borne the brunt of NAFTA. Researchers estimate that more than two million Mexicans, one-quarter of the farming population, left agriculture in the wake of NAFTA’s flood of imports. And over the last 30 years, Canada has lost one-third of its farm families. 

Instead of slowing migration, the passage of NAFTA caused the number of Mexicans crossing the border looking for work to more than double in the 15 years following. Many former Mexican farmers ended up coming north, working in fruit and vegetable fields or meatpacking plants.

Nothing in the USMCA addresses the enormous human cost of the original agreement. It also repeats NAFTA’s favors to multinational corporations. In service to the big meatpackers, Trump’s trade negotiators ignored calls from farm groups to include mandatory country of origin labeling (COOL) for beef and pork. In a gift to drug companies, the USMCA locks in lengthy patents for prescription drugs and adds a 10-year monopoly period for many life-saving biologic medicines. And for the big oil and gas companies, special rights to protect efforts to exploit Mexico’s valuable oil fields – setting back efforts to address climate change.

Democratic presidential candidates have been too tentative to specify what an alternative re-negotiated NAFTA could look like. If grounded in improving the lives of people instead of the corporate bottom lines, a new NAFTA could support policies in all three countries to ensure fair prices for farmers, address non-competitive markets and require mandatory COOL; protect the rights of workers to collectively bargain and establish strong minimum wage levels; and set a high bar for health and environmental protections and climate action. We also badly need to reform trade negotiations from secret, behind-closed-doors negotiations where corporate advisors thrive, to greater openness and opportunities for citizens to have a say.

Sold on false promises, we’ve lived the first NAFTA for 25 years. There never was a pot of gold waiting for our farmers and rural communities. It’s time to drop the free trade fairy tales and set a new path that lifts up farmers, workers and our communities.

Ben Lilliston is director of rural strategies and climate change at the Institute for Agriculture and Trade Studies in Minneapolis.

From The Progressive Populist, December 1, 2019

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