Analyze the impact of NAFTA on Mexican corn farmers. Why did so many Mexican corn farmers lose their livelihoods as a consequence of NAFTA? (1 point)
The North American Free Trade Agreement (NAFTA) had a significant impact on Mexican corn farmers, leading to many of them losing their livelihoods. One major reason for this consequence is the unequal competition faced by Mexican corn farmers due to the agreement.
1. Unequal competition: NAFTA allowed for the liberalization of trade between Mexico, the United States, and Canada, leading to a surge in imported agricultural products, including corn, from the United States. This heavily affected Mexican corn farmers as they had to compete with highly subsidized American corn producers, who could sell their products at lower prices. The US government provided significant subsidies to its corn industry, which enabled American farmers to sell corn at a price lower than the production cost for Mexican farmers.
As a result, Mexican corn farmers found it extremely challenging to compete with the cheaper imported corn flooding the market. They were unable to match the economies of scale or technological advancements of American farmers, further widening the competitiveness gap. This created a situation where Mexican farmers were unable to sell their crops at profitable prices, leading to financial struggles and loss of livelihoods.
Additionally, NAFTA also allowed for the removal of protective tariffs on agricultural products, meaning that Mexican corn farmers faced an influx of cheap subsidized corn without any trade barriers. The sudden increase in imports made it difficult for Mexican farmers to sell their produce, resulting in lower profits and even bankruptcy for many.
In summary, NAFTA's impact on Mexican corn farmers was primarily driven by the unequal competition they faced due to heavily subsidized American corn and the removal of protective tariffs. These factors led to a loss of livelihoods as farmers were unable to compete and sell their crops profitably in the face of cheap imported corn from the United States.