Environmental Engineering Reference
In-Depth Information
varieties of bene
t to humankind as a whole. The shift in corn production from Mexico
to the USA, a trend reinforced by NAFTA, has the net e
fi
ect of increasing environmen-
tal degradation. Contrary to the common applications of the pollution haven hypothesis,
trade has not brought cleaner production through the introduction of developed-country
technology. Rather, it has brought more environmentally damaging practices.
Economist James Boyce has o
ff
ered a particularly useful concept to the discussion of
the environmental impacts of trade: the globalization of market failure. He bases his
analysis on
ff
eld studies of traditional jute production in Bangladesh, which is being dis-
placed by imported synthetic
fi
bers, and traditional corn production in Mexico, which is
threatened by hybrid corn imports from the USA following trade liberalization. He argues
that economic integration links imperfect markets in environmentally destructive ways. In
both cases, the market prices for modern, Northern products fail to incorporate
signi
fi
eld
is tilted even further against traditional producers, who go uncompensated for the posi-
tive environmental externalities associated with traditional production. As trade - and
trade agreements - bring together these two forms of production, distorted in opposite
ways by environmental externalities, the result is unfair competition with net environ-
mental costs. Boyce demonstrates, for example, that nearly the entire price advantage
enjoyed by synthetics over jute - about 35 percent - would be eliminated if environmen-
tal externalities were factored into prices (Boyce, 1999).
As we shall see in the case of changing maize trade between Mexico and the USA, the
fi
cant negative environmental externalities. The international economic playing
fi
fl
ow of pollution-intensive economic activity is from South to North. And economic lib-
eralization, of which NAFTA is a key component, has fueled the globalization of market
failure, increasing environmental damage in the USA while threatening an irreplaceable
environmental (and economic) global good in the South - Mexico's rich reservoir of
maize diversity.
Changing maize trade under NAFTA
Maize and beans were included in NAFTA very late in the negotiations due to resistance
within Mexico to liberalizing the country's two most important staple crops and food
sources. Over farmer objections, Mexico agreed to liberalize maize and beans, along with
other crops, using a tari
ff
-rate quota (TRQ) system to phase in imports and phase out
tari
s. Maize and beans got the maximum 15-year TRQ. For maize, the initial import
quota was set at 2.5 million tons, with 215 percent tari
ff
s on imports above quota. The
quota was set to increase by 3 percent each year, reaching 3.6 million tons by 2008, while
the tari
ff
s on over-quota imports were negotiated to decrease gradually over the same
period, reaching zero by 2008 (Nadal, 2000).
The stated goal of the 15-year TRQ was to allow a slow transition to full competition,
recognizing the wide productivity di
ff
ff
erences between US and Mexican maize producers.
Those di
erences are dramatic. The USA farms nearly four times the area and achieves
yields over three times those in Mexico. This gives the USA 11 times the production, which
at the time NAFTA was passed sold for roughly half the price of Mexican maize. US farm
subsidies also give US producers an advantage, with direct subsidies per hectare about
three times the levels in Mexico (Wise, 2004).
Claiming production shortfalls and in
ff
ationary pressures, the Mexican government
declined to enforce any of the TRQs it had negotiated for agricultural products, including
fl
