Environmental Engineering Reference
In-Depth Information
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 tari
ff
reductions and the
Mexican government's decision not to charge some tari
s to which it was entitled con-
tributed to a tripling of US exports to Mexico. US corn now supplies about one-
ff
fth 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 signi
fi
cant 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 external-
ities 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
bene
fi
ected in international prices.
These externalities allow US corn to be priced below its true costs of production, while
traditional Mexican maize prices do not re
fi
ts of Mexico's biodiverse maize production are re
fl
ect their full value.
The linking of these two dynamics through deregulated trade results in overall envi-
ronmental 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 glob-
alization of market failure (Boyce, 1999).
fl
An analytical framework
The concept most widely associated with the e
ects of trade on the environment is the
pollution haven. According to this theory, rising trade and declining restrictions on the
movement of capital and goods between an industrialized and a developing country will
lead pollution-intensive companies to relocate production to areas in which regulations
and/or enforcement of environmental laws are more lax. Following this theory, it was
feared that NAFTA would produce an exodus of pollution-intensive industries from the
USA to Mexico to take advantage of Mexico's weaker environmental enforcement. This
fear has largely not proven to be a widespread phenomenon, although there are certainly
instances of dirtier industries relocating production to avoid stricter US environmental
regulations. (See Copeland and Taylor, 2003 for a good review of this literature.)
The assumption embedded in the pollution haven concept is that the
ff
ow of environ-
mental degradation will be from North to South, from the more developed toward the less
developed country. This is based on the assumption that cleaner technology and rising
expectations for a clean environment will make practices in the North more sustainable
than those in the South. This is a false assumption for at least some agricultural trade.
Agricultural practices in US corn production are far less sustainable than the traditional
Mexican practices of maize cultivation using - and continuing to steward - diverse seed
fl
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