FLORIDA FARMERS INC.
“ A STRUGGLE FOR SURVIVAL”

THE NORTH AMERICAN FREE TRADE AGREEMENT (NAFTA)

President Reagan brought the idea of free trade with Mexico to open discussion during the latter years of his presidency, and President Bush continued developing these plans. Canada and the United States completed a free-trade pact that went into effect on January 1, 1989, and proposals for a triparty agreement followed. Representatives of Prime Minister Mulroney of Canada, President Salinas of Mexico, and President Bush of the U.S successfully negotiated the provisions, concluding in August of 1992, and signed by the heads of state in December 1992. Opponents of the agreement, who hoped for support from a successful Democratic presidential candidate after the U.S elections of November 1992, delayed ratification by the United States.

Bill Clinton, the Democratic nominee and the President, endorsed the pact with reservations during the campaign. After negotiating supplemental amendments to strengthen environmental and labor protection provisions, the new president led a spirited fight in Congress that split the Democrats but, with overwhelming Republican support, secured ratification of NAFTA in November, 1993.

This agreement binds together three major economies-two mature and wealthy, the third relatively poor but in the throes of rapid and profound modernization. The pact creates a potential $6.4 trillion megamarket of 363 million consumers. At its most basic level, the treaty rolls back as many as 20,000 separate tariffs over the next 10 to 15 years. Pre-NAFTA those barriers averaged nearly 115 in Mexico, around 5% in Canada and less than 4% in the United States. NAFTA takes significant steps to diminish non-tariff barriers, such as dairy and cotton quotas in the U.S. and Canada, and various import licenses in Mexico. By rapidly widening the consumer market, the pact aims to spur capital investment across all jurisdictions

Beyond the technicalities that define any trade, the bottom line of NAFTA concerns growth and jobs. Proponents argued that the agreement would create both. Opponents feared the loss of U.S. jobs, as more companies would relocate south of the border to take advantage of Mexico´s industrial wages that are roughly one-sixth of those in the U.S and Canada. The argument continued that it would be better to lose the jobs to Mexico than to Asia where further losses to U.S suppliers would result.

On the occasion of the implementation of the agreement on January 1, 1994. Indian people of Chiapas declared war on the Mexican government, calling NAFTA traitorous. An armed uprising caused violence and death, contradicting the pronouncement of President Salinas that Mexico was on its way to attaining new status as a modern, industrialized nation. The Chiapas uprising highlighted a fact brought out in the NAFTA debate: vast sections of rural Mexico that have been left out of Salinas´ modernization drive may be fertile ground for future instability.

The countries volatile financial markets reacted in panic to the rebellion, with the largest one-day drop ever recorded. In the following days, the market more than made up for the losses, with much of the buying by U.S and British institutional investors.

A few months later, an assassin shot and killed Luis Donaldo Colosio, the ruling parties´ handpicked successor to President Salinas. The act crippled the confidence of a country striving to enter the select company of First World nations. Economic uncertainty and political disruption joined violent rebellion in a land whose citizens had hoped for peace and stability. The one party P.R.I system elected Zedillo president, who was Salinas´ chosen successor.

An economic bailout ($50 billion line of credit) by the United States helped the new leader work to improve Mexico´s woes, but with he devaluation of the peso NAFTA has done to affect the quality of life in Mexico. The collapse of the peso has made Mexican growers so desperate for dollars they will all but give there winter crops away. The low prices make profits for the middlemen, but consumers in the U.S do not benefit from the price wars being waged, as retail prices tend to remain fairly constant. The farm lobby in the U.S is concerned with other interests, namely cotton and grain, and does not give the Florida growers and suppliers much attention.

The U.S government still imposes strict and appropriate requirements on domestic growers, such as pesticides rule, packaging standards, and a minimum wage for field hands. These rules protect the safety of the American consumer and worker, but do result in higher costs. Mexican growers and suppliers do not have to comply with these standards. Florida law requires country of origin labeling on imported vegetables sold in Florida and extending this law to fresh produce sold in every state would be a service to the American consumer. A bill is pending in Congress to this effect. Proper pacing and inspecting of imported produce would help protect the consumer, also.