Leticia López and Enrique Pérez
The following is an excerpt from Beyond NAFTA 2.0: A Trade Agenda for People and the Planet jointly published by the Canadian Centre for Policy Alternatives, the Institute for Policy Studies and the Rosa Luxemburg Foundation. The full report can be read and downloaded here.
Current free trade policies and agreements are specifically designed to facilitate flows of goods, services and investments, often to the detriment of family farmers and consumers. This is true of US-led trade agreements such as the North American Free Trade Agreement and its successors, as well as trade deals led by the EU and multilateral rules enshrined in the World Trade Organization. The fact that these agreements have increased corporate concentration, environmental degradation and economic and social erosion of rural communities is no accident; it is the result of specific policy choices embodied in the trade deals. Other choices are not just possible but necessary. In many countries, especially in the United States, agriculture and trade policies are mutually reinforcing. Farmers are encouraged to increase production to make up for volatile, and mostly low, prices, and to rely on expanding export markets for sales. This has created a vicious cycle of dumping farm goods at below the cost of production that has hurt family farmers and increased corporate concentration along supply chains.
IATP has documented the extent of dumping since the early 1990s. Since NAFTA’s inception, dumping rates have ranged as high as 33 percent for corn, 44 percent for wheat and 34 percent for rice. After temporary reversals in the wake of the 2008 food price crisis and the 2012 drought, recent figures show a trend toward the resumption of dumping. Our calculations show that as of 2017, dumping rates were 9 percent for corn, 38 percent for wheat, and 3 percent for rice. According to studies, some 4.9 million Mexican family farmers were displaced between 1991 and 2007, with about 3 million becoming seasonal workers in agro-export industries.83 In the United States, more than 250,000 family farms have disappeared since NAFTA’s inception.84
At the beginning of the talks to renegotiate NAFTA, family farm groups from the three countries set a series of benchmarks that would start to tilt the playing field toward food sovereignty. While some organizations, led by the global network La Via Campesina, insist that agriculture be excluded from any trade agreement, others demanded wholesale changes in trade agreements to rebalance power within the food system.
Instead, the new NAFTA takes several steps to lock in corporate power in agriculture and to prevent changes in food and agriculture policies. The US Trade Representative (USTR) lists as a key achievement of the new NAFTA that it prohibits the use of WTO agricultural safeguards. This would eliminate a policy tool used by all three countries to defend against unfair and unstable markets. Article 3.6.1. creates new pressure to ensure that domestic support to agriculture not distort trade. Restrictions on agricultural support programs to make them trade compliant would expose programs to strengthen local markets — including Mexico’s bold new initiative for food security — to potential trade challenges.
Canada’s dairy supply management system has been a ray of hope for US dairy farmers confronting unstable markets, overproduction, and low prices. The Wisconsin Farmers Union, for example, uses the Canadian experience in its own advocacy and grassroots education efforts on dairy policy. But that good example has also been the target of several trade agreements. Under USMCA, Canada agreed to open its dairy (and poultry) markets to 3.6 percent more imports from the US. This seems like a small opening, certainly less than the total dismantling of supply management the US had been demanding, but it comes on top of commitments under other trade deals. Canada also ceded portions of its markets to imports under TPP, CETA, and USMCA. These openings will not significantly reduce the vast oversupply of raw milk, or increase prices paid to US, European, or New Zealand dairy farmers. The Canadian market is simply too small. But it will weaken this important program. The US has also challenged similar programs at the WTO as a restraint on trade.
USMCA includes several new provisions that limit the information consumers, regulators, and farmers need to make decisions about where and how food is produced. Negotiators ignored demands to restore Country of Origin Labeling (COOL) for meat and took several more steps to weaken transparency in the food system. New food labeling restrictions in USMCA, replicating TPP provisions, would allow companies to hide food additives and ingredients in processed foods as “proprietary” trade secrets. In addition, provisions in USMCA pave the way to loosen restrictions on dubious chemicals or agricultural biotechnology before all impacts can be known. The chapter on Sanitary and Phytosanitary Standards includes rules that allow companies to withhold testing data and studies for agricultural chemicals and food safety as Confidential Business Information, despite peer-reviewed evidence of damage to public and environmental health and to commerce. This includes, for example, data pertaining to the Environmental Protection Agency’s commercial authorization of Dicamba, a pesticide so volatile that it cannot be applied without damage, except to crops engineered to resist it. USMCA’s annex on agricultural biotechnology compels regulators to allow for low level presence of biotechnology contaminants not allowed in the importing country.
New provisions on intellectual property require that all countries ratify the 1991 version of the International Convention for the Protection of New Varieties of Plants (UPOV 1991), which prohibits farmers from saving and sharing protected seeds. Since Canada and the United States have already ratified UPOV 91, this requirement is directed squarely at Mexico and would likely undermine efforts to restore food self-sufficiency in grains. It is bad enough that Mexico has ratified this agreement as part of the TPP, but including it in USMCA will undoubtedly result in challenges by the US government and corporations.
Progressive Alternatives for Agricultural Systems
One of the political factors driving the push to ratify USMCA is the fear that Trump will withdraw from NAFTA, potentially disrupting the tangled meat and feed supply chains in North America. Agribusiness exporters may be breathing a sigh of relief that they can continue with business as usual, but for rural communities confronting falling incomes, rising debt and an increasingly unstable climate, USMCA is a lost opportunity for the change we need, one that ensures that farmers, their families and their organizations are at the center of national and international policies.
Indeed, there exists a broad consensus that the resulting USMCA represents a missed opportunity to support equitable and sustainable food systems. An entirely different approach is needed, one that would start with very different goals and priorities:
- Prioritize local markets and local consumers over international markets. A key element of food sovereignty, this does not mean that no trade will take place, only that the priority will be on local communities. Under NAFTA, Mexico is importing nearly half of its grains. The new agriculture plans under the López Obrador administration seek to achieve self-sufficiency in corn, wheat, rice, beans, and milk. A supportive trade policy would allow countries to protect Special Products: goods that are key to food security and rural livelihoods. A coalition of developing countries has been demanding such protections at the WTO for Special Products, along with a Special Safeguard Mechanism for temporary protections against import surges, for more than a decade.
- Ensure economic viability and resilience in rural communities. Trade deals must support farmers being paid fair prices. Mexico’s new plans establish a floor price for production of basic grains and dairy by small-scale farmers, providing a minimum price on a limited quantity of production (along with credit, technical assistance, and other necessary public services) that will allow farmers to increase production and strengthen their communities. Trade agreements should allow for restrictions on imports and authorize domestic support programs for efforts to enhance rural incomes and food security.
- Shelter domestic markets from price or supply volatility. Governments must maintain the ability to manage their food supplies. This will likely become even more important as climate change destabilizes food production. Under Canada’s dairy supply management program, most dairy farms are family owned and operated, and the program helps them stay in business without reliance on public subsidies. This careful effort includes the ability to restrict imports so that they don’t overwhelm the market. Canada’s dairy program was excluded from the original NAFTA. Trade rules should explicitly authorize national supply management programs and foster dialogues on mechanisms to reduce global oversupply of agricultural goods.
- Protect consumers right to know about how and where their food is produced. Canada and Mexico successfully challenged US rules on mandatory Country of Origin Labeling (COOL) for meat at the WTO. Food and farm advocates asked trade negotiators to insist that those complaints be dropped so that an equitable solution could be achieved. Food labels indicating nutritional value, whether goods are produced with GMOs or other agricultural biotechnology, and the country of origin should be explicitly authorized in trade agreements.
- Reduce corporate concentration and control in agriculture. While real changes would require significant new antitrust legislation, trade agreements could pave the way. As in other sectors, investor-state dispute settlement mechanisms that give corporations rights to sue governments over public interest laws should be removed from trade. agreements.
- Authorize rulemaking based on the Precautionary Principle. Too much of current trade policy stems from the imperative to remove constraints to new technologies or cheaper production methods without clear and complete information about their risks to human, animal or environmental health. Trade rules should enshrine reliance on the precautionary principle (as included in the EU’s foundational Treaty of Lisbon), which provides authority for regulators to act where harm is scientifically plausible but uncertain.
- Promote new forms of sustainable food production. It is clear that the model of industrial agriculture production controlled by corporations and spurred by the green revolution has not and will not generate the alternatives we need. It is imperative to push new alternative models of agroecological production. We must pass from an agriculture of inputs to an integrated agriculture of knowledge.