‘Free’ Farm Trade: a Trilateral Hot Potato : Mexico: An agribusiness agreement with Canada and the U.S. must be carefully balanced to avoid human disaster.

Of the 100-plus areas to be negotiated in the free-trade agreement between Mexico, the United States and Canada, agriculture is the most problematical for Mexicans on both sides of the border.

The eloquent silence of Cesar Chavez on this issue is proof of the painful complexities involved in a treaty that aims to make sense in a global economy and benefit a labor force that produces in three countries but is supplied by only one.

Because of his United Farm Workers’ affiliation with the AFL-CIO, Chavez would have to oppose a free-trade treaty. He is, however, also obligated to President Carlos Salinas de Gortari, who, following Chavez’s initiative, made medical services available to members of the UFW and their dependents in Mexico.

As Chavez’s predicament indicates, an agreement on the agricultural sector between Mexico, Canada and the United States must bridge the enormous breach that separates the modern world from the old, and do so with as little pain as possible for millions of frustrated campesinos in the tri-national agricultural labor force.

To illustrate the magnitude of the problem, look at this example: In the United States, about 3 million people cultivate between 250 million and 350 million acres of land with the most modern technology and vast financial resources. By comparison, about 45 million acres of land are farmed in Mexico, where the agricultural industry has a dual characteristic. On the one hand, there are about 20 million campesinos who work the land using 19th-Century tools, without even irrigation systems, and hardly harvest enough food for themselves and their families. These are the men who were the soul of the Mexican Revolution, the disinherited heirs of Emiliano Zapata, whose dream of land and liberty faded out in 1965 when agrarian reform was declared finished in Mexico.

There is another agricultural sector in Mexico that uses modern technology, relies on dams and irrigation systems, keeps updated information and has the administrative skills needed for a successful operation. It is highly productive and employs less than 1.5 million workers. More than half of Mexico’s agricultural exports come from this modern and sophisticated wing of Mexican agribusiness--the capitalist farmer and cattle rancher, the transnational food company and some extraordinary ejidos (state-owned land worked by cooperatives or individual small farmers) in Sinaloa and Sonora.

From a pragmatic point of view, then, the solution for Mexico would be to face reality and devote no more than 3 million people to working the land in a technologically advanced and efficient manner and forget the rest. But how pragmatic can you be after more than 50 years of revolutionary rhetoric about the sanctity of the agrarian sector? What do you do with 20 million landless and jobless campesinos?

Furthermore, the dinosaurian political system that prevails in Mexico cannot survive without the vote of the rural sector, about 30% of the population. According to the official figures of the 1988 presidential election, the strength of both opposition parties came from the cities, the most modern sector of society, whereas the support for the party in power came from rural Mexico, where political manipulation of the electorate is still the savage rule.

If full modernity were to take hold throughout Mexico immediately, it would create a 10-times-more-dramatic flight of campesinos to both Mexican and U.S. urban centers, aggravating everyone’s problems. If, instead, rural modernization is gradual, Mexico can avoid extensive unemployment and massive migration while advancing the process of democratization.

In terms of free trade, then, special consideration should be given to the fact that the field is not even among the three countries--that Mexico is at a clear disadvantage, compared with the United States and Canada. An agricultural agreement that would benefit all three would have to consider that asymmetry.

A second essential notion for a free-trade agreement is complementarity, which geographic and climactic differences would make possible. For example, California and Florida are big producers of oranges for the table, but Mexico, with its more reliable climate, could increase its sales of oranges for juice with no harm to U.S. producers. Mexico could increase sales of fruits and vegetables in the United States and Canada in months when there is no local production, and those countries could increase grain and seed-oil exports without hurting Mexican production.

There is yet another type of complementarity, called co-investment. A model for this exists in the long partnership between Herdez de Mexico and McCormick, USA. Herdez was founded in 1914 as a food and beauty products distributor; when, in 1946, McCormick wanted to sell teas and spices in Mexico, their partnership was a natural. When Herdez decided to open a branch in California to market Mexican products, in 1986, McCormick became its distributor. Business has been good for both. McCormick’s mayonnaise is the market leader in Mexico, and Herdez is the leader in Mexican canned goods here.

But there are problems, too, in an agricultural free-trade agreement; here again, complementarity could be the key. Already, the agricultural workers of California’s Salinas Valley--most of them Mexican and Mexican-American--are worried, because almost half of the region’s agribusiness has moved operations to Mexico. The same concern exists in Monterey County, where agricultural wages have gone down in a decade from $7 per hour to $5.50, due largely to global competition.

This trend in relocation and wages cannot be stopped. Therefore, we should be more imaginative and find opportunities in joint ventures that can create wealth in both sides of the border without a severe drop in jobs or wages. Government here, at every level, should be responsible for retraining workers into more skilled crafts for the industries of the future.

Until and unless there are jobs in Mexico, campesino migration will not stop. The purpose of the trade agreement is to create jobs so that Mexico can export goods and not people. At the same time, trilateral agreements on immigration must be negotiated to protect workers’ labor rights, to preclude the exploitation of the campesino.

The potential for business is there. What is still lacking is a set of clear and permanent rules and a dispute mechanism to resolve conflict. This is precisely what a free-trade agreement would create.