U.S., Mexico trumpet NAFTA changes but farmers balk

WASHINGTON/MEXICO CITY (Reuters) - U.S. officials trumpeted an end to farm trade restrictions under NAFTA, the controversial North American trade deal, on Friday, while Mexican farmers vowed to take to the streets to protest liberalization they fear will run them into the ground.

On January 1, Mexico and the United States dropped the few trade restrictions on farm goods that remained fourteen years after NAFTA brought a new era of commerce to the regional economy.

Overnight, quotas and tariffs were eliminated on U.S. exports of corn and beans going to Mexico, and to two-way trade in sweeteners like sugar.

Mark Keenum, U.S. undersecretary for farm and foreign agriculture, said the agreement had been a win for farmers in both countries, “creating not only dramatic growth in two-way agricultural trade, but providing our farmers, ranchers and processors with the potential (for) new export opportunities.”

Keenum and other U.S. officials met Mexican government counterparts in Mexico City on Thursday in an effort to “ensure that full implementation of NAFTA continues to move smoothly.”

Yet the changes are deeply unpopular in Mexico, where farmers fear unrestricted imports will depress prices and stir competition in producing white corn, which has been grown since the Aztec times.

Most of Mexico’s three million corn producers and half a million bean producers make a living on small farms that are a far cry from the sweeping, industrialized operations that characterize U.S. agriculture.

Corn tariffs have gradually been phased out since the trade deal was implemented, and imports of U.S. yellow corn to Mexico, mostly used in animal feed, have skyrocketed. They now account for close to 35 percent of Mexican consumption.

Farmer organizations in Mexico have refused to sit down with the agriculture secretary to discuss their concerns about the opening of trade for white corn and beans, and are planning nationwide protests on January 31.

“We produce enough in Mexico, we don’t need imports,” said Victor Suarez, head of a small farmer organization.


While Mexican farmers believe the treaty should be renegotiated, the government of President Felipe Calderon seems unlikely to agree.

Timothy Wise, a professor at Tufts University in Massachusetts, calls unblunted liberalization in those sensitive goods a “recipe for disaster” for those who depend on Mexico’s vulnerable farm sector.

“Just as the U.S. became the largest supplier of animal feed, it has the capacity to become a dominant supplier of dry beans and white corn, undermining markets in Mexico and creating a dependence on external sources for the two very clear main staple foods,” he said.

Neither is it likely the Bush administration would move to modify NAFTA.

Trade officials here have already been under pressure from the sugar industry, a powerful U.S. lobby, to scrap the sugar liberalization, to no avail.

“We should not look backwards and risk all we have accomplished,” James Murphy, assistant U.S. trade representative for agriculture, said in a statement.

Farm trade has soared between the two nations since the treaty was negotiated, with two-way trade growing almost fourfold from 1993 to hit $22.2 billion in 2007.

Editing by Russell Blinch and Marguerita Choy