The North American Free Trade Agreement has run its course and must be restructured with stronger labor and environmental components, said policy consultant Katherine DiMatteo.
DiMatteo, who leads policy, regulatory and international services at Wolf, DiMatteo + Associates, presented a seminar on NAFTA and the natural products industry with Len Monheit, president and editor of NPIcenter, during the 2009 Natural Products Expo East in Boston on Wednesday.
NAFTA, passed in 1994 among the United States, Canada and Mexico, connected 444 million people and produced $17 trillion in goods and services. At this point, all tariffs have been eliminated.
But it also has its problems. The trade deficit grew 16.3 percent since June.
“NAFTA was oversold and there is more in labor standards and the environment that needs to be done,” DiMatteo said.
The best way to outline how NAFTA is losing effectiveness is to examine how it has worked in Mexico and what some of the fallout has been for the United States, DiMatteo said. Consider the following:
• Because of NAFTA, Mexico dismantled its domestic support for agriculture, including tariffs on basic foods and programs for rural development.
• The United States lost 200,000 farms.
• Net farm income during NAFTA decreased.
• The number of undocumented migrants from Mexico doubled.
• Corn imports from the United States increased 94 percent.
• Consumer prices in Mexico increased.
• Mexico dismantled its corn-marketing board.
• Mexico has been asked to switch to specialized crops like fruit, causing a loss of knowledge, culture and tradition in the country’s staple food product of corn.
DiMatteo said NAFTA has created “a global food insecurity issue.” But there are several initiatives designed to address this problem. A task force is being organized to renegotiate NAFTA, based on fair-trade policy; not free trade, she said. A civil security coalition of 60 organizations also will outline priorities for NAFTA to support trade reform.
“Labor rights and national sovereignty has to be in there,” she said.