Edited by Kevin P. Gallagher
Chapter 9: The Environmental Costs of Mexico–USA Maize Trade Under NAFTA
Timothy A. Wise The North American Free Trade Agreement (NAFTA) had a profound impact on maize trade between the USA and Mexico. Negotiated quota and tariﬀ reductions and the Mexican government’s decision not to charge some tariﬀs to which it was entitled contributed to a tripling of US exports to Mexico. US corn now supplies about one-ﬁfth of Mexican demand, primarily for feed grain, corn sweetener and processed foods. Although US exports to Mexico account for only about 2 percent of total US production, corn is such a large crop in the USA that the marginal impacts of trade cannot be ignored. The changes in USA–Mexico corn trade had signiﬁcant environmental impacts on both sides of the border. Corn production in the USA has heavy negative impacts, while the production of maize in Mexico predominantly involves positive environmental externalities associated with the stewardship of genetic diversity in the world’s center of origin for maize. Neither the environmental costs of pollution-intensive US production nor the beneﬁts of Mexico’s biodiverse maize production are reﬂected in international prices. These externalities allow US corn to be priced below its true costs of production, while traditional Mexican maize prices do not reﬂect their full value. The linking of these two dynamics through deregulated trade results in overall environmental impacts that are worse than the simple sum of their parts, as underpriced US corn threatens to displace undervalued Mexican maize, a process referred to as the globalization of market...
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