From The Real News Network, Jaisal Noor gives us an enlightening interview of Timothy A. Wise, director of the Policy Research Program at the Global Development and Environment Institute at Tufts University.
Want to understand NAFTA? Here’s something to consider the next time you hoist a glass of Modelo Negro:
20 Years on, Mexico is NAFTA’s Biggest Lie
From the transcript:
NOOR: And, Tim, so, in a recent piece you wrote, you talk about attending a lush cocktail reception, and you were talking to a U.S. embassy attache, and he argued that Mexico is now exporting more food to the U.S. And beer factors into that. Talk about why you argue that kind of demonstrates everything that’s wrong with NAFTA and its effects on Mexico.
WISE: Well, it’s a little bit of a sleight of hand to say that—you know, if you ask, how has trade, how has agricultural trade between the two countries fared, and you look at the trade deficit for Mexico, it’s grown significantly. The trade deficit was over $4 billion in recent years with the price spikes. He said to me, well, they’re going to run an agricultural surplus with the United States this year. And I—in 2013. And I said, well, you mean the agri-food trade balance. And that’s a technical category that’s a meaningful category, but it includes everything produced in the food sector. So, notably—and I said to him, so you’re including beer and tequila, two of Mexico’s great NAFTA success stories, as exports. And he said, well, of course, and they are agricultural exports. And I said, well, why? And he said, well, because, you know, it’s great for—this is a case of NAFTA’s success, because not only is Mexico increasing its beer exports to the United States, it’s actually importing all of the barley malt to make them, to make all that beer, from the United States. And I said, well, where is the agricultural benefit for Mexico, then? There’s nothing agricultural in Mexico coming from Mexico for that beer. The barley’s from the U.S, the malt-making’s from the U.S, and effectively Mexico’s contributing water and bottling. And Mexico doesn’t have water. It’s short of water.
So this is—what’s classic about it for the kind of problems it represents for the ways that countries like Mexico have approached an agreement like NAFTA is that even where Mexico has a comparative advantage, making a very good, competitive beer—you know, you’re talking about Corona and Modelo and a lot of the—Dos Equis and a lot of the brands that have really been success stories—if they can’t export, they give away the value that’s gained from that. They don’t grow the barley to make it. They don’t even import the barley and grow the malt and produce the malt to make it. And now the two main Mexican companies have been bought up with controlling shares by foreign beer-makers, so even the profits don’t really stay in Mexico.
So where is the development impact from the North American Free Trade Agreement if you’ve given away all the valuable parts of the production process?