New Opportunities, New Struggles

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Before dawn one damp October morning three years ago, Leonardo and Vicente Diaz descended a muddy slope deep in Mexico's southeastern rain forest, hopped into a canoe and crossed the big river the Aztecs called "place of monkeys."

The North American Free Trade Agreement had brought only pain to this corn-growing settlement. Young men like the two cousins, who dreamed of something better, were leaving. "If you stayed in the fields," said Vicente Diaz, "you would never get ahead in life."

Three bus trips, 35 hours and 640 miles after they set off, the Chol Indians, then 17 and 21, reached arid, mile-high Aguascalientes, where an uncle awaited them. Within a week they had jobs in the city's auto industry, which exports nearly 12,000 Nissan cars and trucks a year to the United States.

Their passage from a village with one motor vehicle and no toilets to a prosperous city with 11 industrial parks illustrates the trade-offs NAFTA has forced on Mexicans. In the treaty's first decade, more than 1 million of them have gained jobs manufacturing goods for export to the United States and Canada. But even more, 1.3 million, have been pushed off unprofitable farms by cheap American grain imports. And NAFTA has yet to improve overall wages, reduce the number of people living in poverty or close the gap between the rich and poor.

The drafters of NAFTA, which took effect in January 1994, envisioned a smoother adjustment for Mexico's 18 million rural poor. Places like San Jose Usumacinta would send laborers to export plants. Those staying behind would switch from corn to crops with a profitable niche in the North American market.

But with little credit or technical aid to make the switch, millions of farmers stuck with corn and sank deeper into poverty. And after 2000, growth of Mexico's assembly lines stalled because of the U.S. recession and the rise of low-wage competitors such as China.

The Diaz cousins are a NAFTA success story. But their success comes with the knowledge that they'll never return home -- and the burden of helping sustain their elders' farms from afar.

Each cousin earns $74.36 a week at Sanoh, a Japanese-owned auto parts supplier. That is an average wage for Mexico, but not enough, the cousins say, to let them help their families and build new futures for themselves.

"I send home what I can," Vicente Diaz said, turning down the boom box in his $55-a-month rented house in Aguascalientes. "The situation back there is depressing, something you would never want to live through. I left, but I have a permanent obligation to help them."

Leonardo's father, Anselmo, knows that his son is unlikely to return. "When the young leave here to follow their dreams," he said, "they do not come back."

The boom in Aguascalientes and the pain in San Jose Usumacinta grew out of policies Mexico embraced two decades ago and locked in place with NAFTA.

Corn prices tumbled in the 1980s as the government stopped guaranteeing purchases and phased out aid to the countryside. Although NAFTA set a 15-year schedule for eliminating tariffs on imported corn, Mexico was letting it in duty-free by the mid-1990s.

Midwestern U.S. corn growers, who can produce at least four times as much per acre as Mexican farmers, now meet nearly one-third of Mexico's needs. They have driven down corn prices by as much as 70%, according to groups representing the 3 million Mexican families who still grow the crop.

Mexican leaders, meanwhile, used tax incentives to lure foreign assembly plants, first to northern border cities, then farther south. Nissan, Texas Instruments and Xerox opened factories in Aguascalientes in the 1980s, positioning that city for a high-tech export surge under NAFTA. Nissan and a dozen Japanese auto parts makers now employ 13,683 workers in Aguascalientes, part of a burgeoning common market for auto production and sales that is one of the treaty's biggest achievements.

A well-managed city of blue skies, hot springs and 700,000 people, Aguascalientes has gained 62,000 manufacturing jobs under the trade pact and steady ratings as one of Mexico's best places to live and do business. Software engineers drive BMWs and Audis to attend the opera, play golf and shop at U.S.-style malls. Per capita income is $7,870, nearly $1,000 higher than it was 10 years ago and three times higher than in Chiapas state, where San Jose Usumacinta is located.

"There are two Mexicos -- one to the north of Mexico City, the other to the south -- and when you visit our city the breach between levels of well-being leaps out at you," said Ruben Camarillo, minister of economic development for Aguascalientes state. "NAFTA has not changed that."

To visit San Jose Usumacinta is to go back in time. One must walk five miles from the nearest drivable road in Chiapas or paddle across the Usumacinta River from Tabasco state.

Isolation defines the community, which was founded 40 years ago by Chol pioneers who hacked through the jungle. Villagers watched a single television set powered by a car battery until electricity arrived in 1989. Today, its 70 households own just six telephones and 12 refrigerators.

Like nearly half of Mexico's population, all 415 villagers live below the official $4-per-day poverty line. Men plant corn by poking the soft earth with sticks. Women walk all day to collect bimonthly welfare payments of as little as $28 per family. A midwife delivers the babies, who grow up suffering diarrhea contracted from tainted well water.

"The first time I visited, I got goose bumps," said Eric Suriano, who doles out the welfare from a federal anti-poverty program. "I did not realize human beings still live that way."

The villagers have no medical coverage, unlike assembly-line workers, and do not know what crop insurance is. In 1998, Vicente Diaz and his siblings had to sell the family's 49-acre farm to raise $660 for their widowed mother's kidney stone operation.

The village's two memorable efforts to rise above subsistence farming ended in disaster. A 1982 volcano eruption wiped out grazing land for cattle, which had to be sold off at a loss. Several promising crops of jalapeno peppers succumbed in the 1990s to plagues of grasshoppers.

With that began an exodus of the settlement's third generation, of members like the Diaz cousins and about 40 others. Some scattered to work in Cancun's resort hotels and oil rigs in the Gulf of Mexico. Eight wound up in the auto plants of Aguascalientes.

"The only thing we can export is our children," said Lucio Diaz, a second-generation settler related to the cousins. He owns the only vehicle in town, a rusting 1981 Ford pickup. "If you have 10 children, you send away five to support the others."

Leonardo and Vicente blossomed in their new surroundings. Shy but cheerfully unfazed by urban life, the young bachelors, now 20 and 24, have set goals beyond the five-acre Sanoh plant where Leonardo assembles tubes for brake lines and Vicente drives a forklift.

They entered an adult-education program with the aim of finishing high school -- back home, both had dropped out after ninth grade to work the fields. But Leonardo soon abandoned school for a new passion. Tired of being bullied by street thugs, he enrolled in a taekwondo school and spends three nights a week mastering the Korean martial art.

A 131-pound amateur, he won a regional tournament in November. The next day, with his sprained right hand bandaged, he showed off his medal and spoke of a new dream -- to earn a black belt and manage a branch of the taekwondo school.

Meanwhile, he has taken up guitar and joined the Sunday choir at Our Lady of Guadalupe Roman Catholic Church.

Vicente, aspiring to a managerial rank in industry, has taken a computer course and opened an e-mail account and plans to study administration after getting a high school certificate.

At first, both men dutifully sent money home. But soon, their own ventures began consuming more of their wages.

"He has a lot of expenses up there," said Vicente's mother, Maria Elena Gutierrez, grinding corn into tortilla paste in her dirt-floor kitchen in San Jose Usumacinta.

The 48-year-old widow needs about $100 a month to support herself, a daughter in school and a baby granddaughter. Estela Diaz, a grown daughter who also lives with her, contributes $30 a month from a tiny grocery she runs from the house. The family's welfare allotment brings in an additional $15.

Vicente and three siblings who have left the farm barely manage to provide the remaining $55 they need, the mother said.

Family remittances to the village, its inhabitants say, now exceed the $450 annual "income deficiency payment" that the government gives each farm here in lieu of price supports.

Those federal payments were supposed to free small growers from dependence on corn, allowing them to respond to market demand for crops they could grow profitably. A state official suggested that jalapeno peppers might make a plague-free comeback in San Jose Usumacinta if they were grown in hothouses. But the farmers say they cannot make such an investment without credit or technical aid.

"They have excellent land. They could be growing a world of things. But they are ignorant of the programs we can offer to help them," said Rodrigo Gutierrez, a state agriculture official.

Asked when someone would go to the village to explain, Gutierrez said his office was responsible for a vast area with many isolated settlements. "Maybe next year," he said with a shrug.

Alejandro Nadal, an agricultural economist in Mexico City, said the government has written off the rural poor. "Federal revenues are directed to other priorities," he said, "and the countryside stopped being a priority a long time ago."

Villagers worry about the priorities of their migrant sons.

A year ago, Leonardo came home and told his parents he was buying a two-bedroom cinderblock house in a monotonous row of publicly financed dwellings for factory workers in Aguascalientes.

Another cousin, Magdaleno Hernandez, would move in and pay rent, Leonardo announced, but to meet the $69 monthly mortgage plus installment payments on furniture, he would have to stop sending money home for a while.

"It's your life," his father replied. "But don't forget us."

Vicente bought his own modest place last month and soon will move in with two wage-earning siblings. They continue sending money home to their mother, but the effort has disrupted Vicente's studies.

Seated on his new couch one evening, Leonardo fretted over the two men's growing obligations and the fact that neither has had a wage increase in well over a year.

It is a complaint heard across Mexico: Despite productivity gains under NAFTA, wages remain low, mainly because workers still outnumber jobs.

Mexico's enduring poverty and wide wage disparity with the United States has fueled an undiminished northbound flow of illegal migrants over the NAFTA decade -- even a stepped-up exodus from prospering Aguascalientes.

Sanoh's workers earn one-eighth what their counterparts make at U.S. auto plants, and 30% of employees who quit Sanoh tell the boss that they are leaving for the United States to earn more money.

That is not Vicente's plan. Having come so far, he is bullish on his own potential -- and Mexico's. "I do not believe that we have a destiny to be poor forever," Vicente said. "I left the farm so I could earn enough to keep studying, keep advancing. From what I have read, NAFTA has improved things here in northern Mexico. If we make the effort, we can achieve something even better."

Rafael Aguirre in The Times' Mexico City Bureau contributed to this report.

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