Escape Valves

September 25, 2007

PERHAPS THE TWO MOST IMPORTANT FEA- tures limiting popular discontent in Mexico originate in the unique set of bilateral relations the country maintains with the United States. On the one hand, millions of Mexi- cans depend on their jobs in the north for a substantial part of their income, the sustenance of their families, and even their ability to work in Mexico. Surprisingly, in the wake of the Immigration Reform and Control Act of 1986, many Mexi- cans claim it is now easier to cross the border and obtain work. This is partly because of the widespread distribution of legalized working papers under the amnesty and the replace- ment labor recruitment programs; others report that it is still easy to obtain employment as an undocumented worker in the rural U.S. labor market and that it is now less costly and less dangerous to cross the border than in the past. Remit- tances by laborers in the United States have become a significant source of foreign exchange for Mexico and are essential for many families, especially in rural areas, for basic living expenses and to pay the costs of sowing their sub- sistence crops. The second element, less widely commented upon, is the impact of the international food support programs of the U.S. government on Mexican economic policy. As grains still play an important role in the U.S. export picture, its interna- tional credit operations encouraged and facilitated the Mexi- can government's decision to abandon support for small- scale rain-fed agriculture. Mexico is able to maintain a cheap food policy by importing growing volumes of food- stuffs-grains, oilseeds, milk, meat-as well as animal feed. Mexico benefits from international competition and from the political demands of farmers in the United States and the European Common Market that forced their respective governments to spend more than $200 billion in 1989 on food exports subsidies. The concessionary credit terms of organizations like the U.S. Commodity Credit Corporation further sweeten the pot. Since Mexico's purchases of agricultural products are sim- ply added to the country's long-term international debt, these imports are seen as effectively free by the current politica leadership. which does not have to concern itself with repay inp long-term obligations. The "soft" export credits requin no budgetary outlays during the present six-year presidentia term: in fact, the public sale of this imported food represent! net income to the government.

Tags: NAFTA, Mexico, opposition, migration, food aid

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