‘This Is Life or Death for Us’: Mexico’s Farm Movement Rejects New NAFTA Agreement

By Timothy A. Wise

This article was published in September at Common Dreams, before Canada’s negotiators signed onto the “new NAFTA” (officially, the United States-Mexico-Canada Agreement, or USMCA). The agreement still needs to be ratified by the legislatures of each country, and opposition by Mexico’s farm movement could induce the new president, López Obrador, to oppose it. –Eds.

The smooth ride to a new North American Free Trade Agreement (NAFTA) may have just hit the bumpy roads of rural Mexico. On Tuesday, leaders of Mexico’s farm movement strongly condemned the new agreement announced between the United States and Mexico, calling on the new president they supported in recent elections to get involved and slow the race to the new agreement.

“We need to push our new president to stop the signing of this agreement,” said farm leader Gerónimo Jacobo in an interview. “This is life or death for us. With NAFTA it will be a slow death. Our national sovereignty is at stake here!”

On August 27, U.S. President Donald Trump announced he had reached a deal with the Mexican government on a new version of the NAFTA. In a garbled televised phone call, the president congratulated lame duck Mexican President Enrique Peña Nieto, claiming he had fulfilled his campaign promise to “replace NAFTA” and christening the new deal “The U.S.-Mexico Free Trade Agreement.” For his part, Peña Nieto, whose party was trounced in July 1 elections, claimed the agreement as his legacy.

No one, though, could claim they actually had a new NAFTA. Canada, NAFTA’s other commercial partner, was left out as President Trump rushed to meet a self-declared deadline that would allow the agreement to be signed by Peña Nieto, before Andrés Manuel López Obrador takes office December 1. Canada was offered the opportunity to join the agreement, though negotiations continue.

Surprisingly, representatives from the incoming government of López Obrador (also known as AMLO) participated as observers and endorsed the new agreement. Jesús Seade, López Obrador’s designated NAFTA negotiator, raised a few small issues in the last days of the negotiations, but publicly supported the deal, a stance widely seen as trying to ensure financial stability in the transition to his new government. It was surprising because the incoming president had been a strong critic of NAFTA in the past.

Farmers: Not so fast!

What was surprising to Mexico’s energized farm movement were the anti-agriculture biases in the negotiated text. The movement had gone all-out for López Obrador and his Morena party, turning out more than 50% support across rural Mexico, unprecedented in a country in which the ruling Institutional Revolutionary Party tightly controlled the rural vote. They did so because the candidate had publicly signed on to their radical program for farm reform, the Plan de Ayala 21st Century, after Emiliano Zapata’s original rural reform program early last century. (See my previous article.)

The new program called for support for small-scale farmers of maize and other staple crops as part of a campaign to restore food self-sufficiency in a country that now imports some 46% of its food, mostly from the United States. The Plan de Ayala also called for a renegotiation of NAFTA to stop U.S. farm products from flooding Mexico with cheap, subsidized crops.

The new agreement fails to allow Mexico to protect staple crops from such U.S. agricultural dumping. New research from the Institute for Agriculture and Trade Policy shows that U.S. maize (corn) has been exported in the last three years at prices 10% below what it cost to produce. Wheat has been exported 33% below the costs of production, and rice as also seen a dumping margin. All three crops are priorities for López Obrador’s new Office of Food Self-Sufficiency, to be headed by longtime farm leader Victor Suárez.

At Tuesday’s press conference, farm movement leaders rejected the new deal and called on the current government not to sign it, deferring the decision to the new president with his overwhelming mandate. (His party won 53% of the vote in a five-person race and took majorities of seats in both the House and the Senate.) In a statement, leaders said NAFTA is responsible for the impoverishment of small and medium-scale farmers.

They denounced the new agreements on biotechnology as a backdoor way to force genetically modified maize and other crops into Mexico. López Obrador has been clear since the election that his administration will no longer allow the use of GM maize and soybeans. Farmers fear the new NAFTA could compel him to do so.

Similarly, there are rumors that an annex to the agreement would bar Mexico from putting labels on food packaging warning consumers about fattening, sugary, and unhealthy food. In other countries such measures have proven effective, and Mexico faces a growing obesity epidemic attributed significantly to imported processed food and sodas. Another provision could make it difficult for the new government to pay support prices to small-scale farmers as a way to stimulate local production.

With the actual text of the agreement still secret, farm leaders demanded that the full text be made public and that the new congress hold hearings on the agreement before it is signed.

“We have ghost towns because of NAFTA”

“Peña Neto shouldn’t sign it,” farm leader Rocío Miranda told me. “He has presided over a terrible increase in hunger. We have ghost towns in rural Mexico because of NAFTA.”

Miranda said she is very optimistic about the government’s commitment to small-scale farmers. “The new government represents the people harmed by NAFTA.” But she hopes López Obrador will step in to ensure that the new NAFTA does not contradict his ambitious rural agenda.

“The farmers’ movement is concerned,” she said, as negotiators wait to see if Canada will sign on before the end of September. “The new NAFTA could undermine our efforts to regain our food self-sufficiency.”

*Timothy A. Wise is a Senior Researcher on the Land and Food Rights Program at Small Planet Institute and a researcher at the Global Development and Environment Institute at Tufts University.

Can Big Internet Security Problems Be Fixed Retroactively? (2/2)

Via the Real News Network; Pt. 2 of a series, “US Policy Toward Global Internet Governance Is Misguided Says Richard Hill.”

Transcript:

LYNN FRIES: It’s The Real News. I’m Lynn Fries. We are continuing our discussion with Internet governance expert Richard Hill. Richard Hill is president of the Association for Proper Internet Governance and a former official at the International Telecommunication Union. Welcome back, Richard.

RICHARD HILL: Thank you.

LYNN FRIES: Let’s pick up where we left off in Part 1. Your concluding point was that there should be no discussion of free flow of data at the World Trade Organization until certain preconditions are met; notably, global agreement on antitrust regulation and on data privacy protections. Talk now about the background to this. Talk more about this U.S.-led push.

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Business Models of NSA & Companies Like Google Are About the Same?

Via the Real News Network; Pt. 1 of a series, “US Policy Toward Global Internet Governance Is Misguided Says Richard Hill.”

Transcript:

LYNN FRIES: It’s The Real News. I’m Lynn Fries.

The U.S. and the private companies it backs have far more say regarding the global internet than anybody else, and they use this power for political ends, mass surveillance; and for economic ends, the very high profits reaped by companies such as Google. The U.S. and its allies have systematically blocked discussion on Internet governance as it pertains to public policy at any United Nations forum that might not conform to U.S. expectations. The U.S. largely denies that certain internet services should be public services, or public goods, and rejects any intergovernmental role in supervising, much less regulating, the Internet.

These are all points related to internet governance raised by Richard Hill. Here to talk to us about all this is Richard Hill. Richard Hill is president of the Association for Proper Internet Governance, and a former senior official at ITU, the International Telecommunications Union. Dr. Hill holds a Ph.D. in statistics from Harvard, and is author of The New International Telecommunication Regulations and the Internet. Welcome, Richard.

RICHARD HILL: Thank you.

LYNN FRIES: What do you make of this call by Microsoft for governmental regulation of face recognition software?

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September 17, 2018 | Posted in: Uncategorized | Comments Closed

Trump Is Giving Protectionism a Bad Name

By William G. Moseley (guest post)

While it might not seem like it now, President Donald Trump is a gift to free market-oriented economists and policymakers. His clumsy approach to protectionism has ignited a trade war that inevitably will harm the U.S. economy. When the pendulum inexorably swings the other way after the Trump fiasco, free trade ideology will return with a vengeance. This is a potential tragedy for left-leaning policy analysts who have long been concerned about the excesses of neoliberalism and argued for a more measured use of tariffs to foster local economic development. As such, it critical that we distinguish between Trump’s right-wing nationalist embrace of tariffs and the more nuanced use of this tool to support infant industries.

As a development geographer and an Africanist scholar, I have long been critical of unfettered free trade because of its deleterious economic impacts on African countries. At the behest of the World Bank and the International Monetary Fund, the majority of African countries were essentially forced, because of conditional loan and debt-refinancing requirements, to undergo free market–oriented economic reforms from the early 1980s through the mid-2000s. One by one, these countries reduced tariff barriers, eliminated subsidies, cut back on government expenditures, and emphasized commodity exports. With the possible exception of Ghana, the economy of nearly every African country undertaking these reforms was devastated.

This is not to say that there was no economic growth for African countries during this period, as there certainly was during cyclical commodity booms. The problem is that the economies of these countries were essentially underdeveloped as they returned to a colonial model focused on producing a limited number of commodities such as oil, minerals, cotton, cacao, palm oil, and timber. Economic reforms destroyed the value-added activities that helped diversify these economies and provided higher wage employment, such as the textile, milling, and food processing industries. Worse yet, millions of African farmers and workers are now increasingly ensnared in a global commodity boom-and-bust cycle. Beyond that cycle, they are experiencing an even more worrying long-term trend of declining prices for commodities.

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University of Vermont Penalizes Rethinking Economics

By Steve Keen, professor and Head of the School of Economics, History and Politics at Kingston University in London
Cross-posted from his Patreon page.

Mainstream economics clearly failed humanity in 2007, when, as the world sat on the brink of the biggest economic crisis since the Great Depression, mainstream economic models were predicting that 2008 was going to be a great year.My favourite such prediction was the OECD’s bi-annual Economic Outlook, which proclaimed in June of 2007 that “the current economic situation is in many ways better than what we have experienced in years“.

 

EDITORIAL

ACHIEVING FURTHER REBALANCING

In its Economic Outlook last Augutm, the OECD took the view that the US slowdown was not heralding a period of worldwide economic weakness, unlike, for instance, in 2001. Rather, a “smooth” rebalancing was to be expected, with Europe taking over the baton from the United States in driving OECD growth.

Recent developments have broadly confirmed this diagnosis. Indeed, the current economic situation is in many ways better than what we have experienced in years. Against that background, we have stuck to the rebalancing scenario. Our central forecast remains indeed quite benign: a soft landing in the United States, a strong and sustained recovery in Europe, a solid trajectory in Japan and buoyant activity in China and India. In line with recent trends, sustained growth in OECD economies would be underpinned by strong job creation and falling unemployment.

 

That was two months before the crisis began.

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Will Trump’s Trade War Make America Great Again?

By Jomo Kwame Sundaram, Anis Chowdhury
Crossposted at Inter Press Service.
The United States has had the world’s largest trade deficit for almost half a century. In 2017, the US trade deficit in goods and services was $566 billion; without services, the merchandise account deficit was $810 billion.
The largest US trade deficit is with China, amounting to $375 billion, rising dramatically from an average of $34 billion in the 1990s. In 2017, its trade deficit with Japan was $69 billion, and with Germany, $65 billion. The US also has trade deficits with both its NAFTA partners, including $71 billion with Mexico.
President Trump wants to reduce these deficits with protectionist measures. In March 2018, he imposed a 25% tariff on steel imports and a 10% tariff on aluminium, a month after imposing tariffs and quotas on imported solar panels and washing machines. On 10 July, the US listed Chinese imports worth $200 billion annually that will face 10% tariffs, probably from September, following 25% tariffs on $34 billion of such imports from 7 July.

Argentina: 20 Years on, Has the IMF Really Changed Its Ways?  

By Gino Brunswijck, Maria Jose Romero and Bodo Ellmers, The European Network on Debt and Development (Eurodad)

Argentinians are experiencing deja-vu this month as the government announces massive layoffs and a hiring freeze as part of an adjustment package attached to a loan from the International Monetary Fund (IMF). Thousands of public servants are being forced yet again to swallow the bitter pill of austerity, which the IMF programme – published last Friday – aims to patch up through increased targeted social assistance.

For many Argentinians the financial crisis gripping the country, and the return to the Fund, brings back bad memories of 2001. Then, IMF-induced policies triggered the worst economic meltdown in Argentinian history.  A cocktail of austerity measures contributed to the contraction of economic activity with a loss of 20 % of GDP between 1998 and 2002. They also compromised the government’s ability to provide essential services; unemployment soared above 20 % while real wages dropped by 18%; and poverty affected more than half of all Argentinians. Children were most affected, with seven out of 10 falling below the poverty line.

To appease popular discontent, the government and IMF officials have emphasised that this time the Fund has changed its ways. However, a comparison between previous and current agreements points to business as usual, focusing on traditional austerity with a few cosmetic tweaks.

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EU Elite on the (Far) Right Side of History

By John Weeks

There seems some disagreement as to whether Nero played the violin or the harp as Rome burned in AD 64.  Whatever happened 1,954 years ago, there was considerable complacent fiddling in Brussels after the 4 March Italian election.  To replace the centrist government of neoliberal Matteo Renzi Italian voters cast 60% of their ballots for two anti-EU parties, the aggressively xenophobic coalition of Lega neo-fascists and the anti-immigrant 5 Star Movement (Movimento 5 Stelle, M5S).

Confounding the hope and expectation of the EU elite, this pair formed their misbegotten government in Rome in April.  The anti-EU rhetoric of these two parties, plus their promise to breech EU budget rules – end fiscal austerity – ended the fiddling and set off alarm bells.

The EU elite quickly moved to prevent this anti-establishment government from rocking the Brussels neoliberal consensus.  The nominally neutral Italian president refused to accept the first proposed coalition government of the Lega-M5S.  The refusal did refer to thee proposed racist immigration policies, nor to its aggressively anti-Roma policies.   Unacceptable to the president that the person nominated for finance minister, who had long standing opposition to the euro (see commentary by Yanis Varoufakis).

Should anyone miss the implied priories of the Italian establishment, the president sought to form an interim government that would continue Brussels-designed austerity policies. To lead that government the president chose a former functionary of the International Monetary Fund.  This affront to the electoral process proved short-lived.  Soon the far right Lega and eclectic right M5S were back in government with a different, but no less anti-austerity, finance minister.

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Why Mexican Farmers Are Hopeful About López Obrador’s Win

By Timothy A. Wise

The victory of Andrés Manuel López Obrador and his Morena party in Sunday’s Mexican elections has stunned international observers. The center-left insurgency received an estimated double the votes of its nearest rival in a multi-party presidential race, winning more than 50 percent of the vote, several important governorships including the first woman to run Mexico City, and an absolute majority in the House of Representatives and the Senate. However the final tally ends up, López Obrador has a resounding mandate for change.

Many observers have interpreted the results as a vote against rampant corruption; given the pervasive graft and influence-peddling in Mexico, López Obrador’s clean, austere reputation was certainly a factor for voters. But economic factors also motivated many voters, especially farmers. The majority of Mexicans have been left behind in a failing strategy to hitch the country’s fortunes to open trade with the United States under the North American Free Trade Agreement (NAFTA).

As one recent report summarized, “Poverty is worse than a quarter century ago, real wages are lower than in 1980, inequality is worsening, and Mexico ranks 18th of 20 Latin American countries in terms of income growth per person in 21st century.” It is hard to imagine worse outcomes in a country with privileged and historic access to the largest capital and consumer markets in the world—the U.S.

Among those rejoicing now over López Obrador’s victory are Mexico’s farmers, who have been largely abandoned by the government while unregulated imports of below-cost maize, wheat, pork, and other agricultural goods flooded Mexican markets under NAFTA. (See my report.) After the agreement took effect in 1994, maize farmers endured a 400-percent increase in imports of U.S. maize priced 19-percent below its costs of production, resulting in a punishing 66-percent drop in producer prices. Producers of other farm goods faced similar pressures, forcing many to become migrant workers in the strawberry fields of multinational growers or migrate to the U.S. without documentation.

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Global Financial Governance Ten Years After the Crisis

The financial crisis of 2008, which resulted in the near meltdown of the world’s financial and banking system, has left a lot of questions unanswered regarding reform and whether enough has been done to avoid another similar crisis. A leading authority on financial governance, Ilene Grabel, Professor of  International Finance at the University of Denver, spoke to C. J. Polychroniou about where things stand today ten years after the biggest capitalist crisis since the Great Depression. (Cross-posted at Global Policy.)

C. J. Polychroniou: It’s been ten years since the outbreak of the financial crisis, and the verdict on the effect of that crisis on global financial governance remains largely ambiguous.  Nonetheless, all this may soon change as a result of the publication of your recent book titled When Things Don’t Fall Apart: Global Financial Governance and Developmental Finance in an Age of Productive Incoherence.  In this book, you argue that much has in fact changed since the East Asian financial crisis of 1997-98 and especially since the global financial crisis of 2008. In what ways has global financial governance changed over the last couple of decades?

Ilene Grabel: I argue that the contradictory effects of the East Asian financial crisis (EAFC) of 1997-8 laid groundwork for consequential (albeit paradoxical) shifts in several dimensions of global financial governance and developmental finance that deepened during and since the global crisis. The EAFC solidified neoliberalism through the leverage granted to external and domestic actors who had been previously unable to secure liberal reform prior to the crisis. The EAFC also inaugurated a gradual, uneven rethinking of capital flow liberalization. In addition, the crisis gave the IMF a vast new client base. But the crisis was ultimately costly to the institution because its crisis response led EMDEs to implement strategies (such as reserve accumulation) to escape its orbit. Reserve accumulation was enabled by the fortuitous global economic conditions that followed the EAFC.  The Asian Monetary Fund (AMF) proposal catalyzed by the EAFC was quickly scuttled by tensions between Japan and China, tensions that were adroitly exploited by the IMF and the U.S. government, both of which strongly opposed the AMF. Though the AMF proposal failed, the crisis ultimately bore fruit in the region and beyond. Not least, it yielded the creation of a currency reserve pooling arrangement among the members of the Association of Southeast Asian Nations plus Japan, China, and South Korea (ASEAN+3). More broadly, the EAFC stimulated in other regions of the developing world an interest in regional mechanisms that could deliver countercyclical liquidity support and long-term project finance through institutions that are, to some degree or other, independent of the Bretton Wood Institutions (BWIs, namely, the IMF and World Bank). In sum, the EAFC marked the beginning of the end of a unified neoliberal regime.

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