Cross-Border Deluge: How US Farms Overflow Mexican Markets through Trade Agreements

Since the beginning of the North American Free Trade Agreement (NAFTA) in 1994, Mexico has experienced a dramatic deterioration in its ability to grow its own food. This is particularly true for basic grains and meats, which have flooded Mexico with cheaper exports from the United States after NAFTA eliminated most of the trade restrictions Mexico had used to protect its farmers from foreign competition. As a result, many Mexican farmers have been pushed out of business, and Mexican producer prices have slumped in half with the onslaught of cheap US dairy. U.S. dumping has cost Mexican corn and wheat producers nearly $6 billion in lost value for their crops.

The subsidies given to American corn farmers allow them to sell their grain at prices far below what it costs to produce, leading to cheap American corn flooding the Mexican market and pushing the poorest Mexican farmers out of business. This has washed away 1.3 million small farmers, who were unable to compete and had to leave their land.Trade practices such as agricultural dumping are unfair and are proscribed by a range of international trade agreements. U.S. dumping undermines Mexico’s legitimate efforts to stimulate domestic production of priority food crops and reduce its dependence on imports. Agricultural trade has increased in both directions under NAFTA, but Mexico’s rising levels of import dependence are closely related to the flood of cheap imports from the US.