Handbook on Trade and the Environment
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Handbook on Trade and the Environment

Edited by Kevin P. Gallagher

In this comprehensive reference work, Kevin Gallagher has compiled a fresh and broad-ranging collection of expert voices commenting on the interdisciplinary field of trade and the environment. For over two decades policymakers and scholars have been struggling to understand the relationship between international trade in a globalizing world and its effects on the natural environment. The authors in this Handbook provide the tools to do just that.
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Chapter 9: The Environmental Costs of Mexico–USA Maize Trade Under NAFTA

Timothy A. Wise


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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