Tuesday, December 15, 2009

Immigration reform will require the US to re-examine its economic relationship to Mexico

Christians in the U.S. who support immigration reform believe that people who face economic security, war or political persecution in their homelands have the right to emigrate. Countries that can support such people have the responsibility to take them.

However, some Christian thinkers, such as Pope John Paul II have also stated that people have the right notto emigrate - in other words, to live in safety and security in their own homelands. Other nations have the corresponding responsibility not to economically exploit other countries and to actively help them develop strong, stable and just economies.

The U.S. must soon reform its immigration policies. It must ensure that all citizens and permanent residents who have families abroad are reunited with their families. It must create a robust and fair guest worker policy at minimum - and preferably create more and more sensible avenues for workers to immigrate legally. However, in the long run, the U.S. will also need to examine economic injustice as a driver of immigration from Mexico and Latin America. Related to that issue, Elisabeth Malkin, writing for the NYT Economix blog, examines the effect of NAFTA on Mexican agricultural companies:

When American companies cannot compete against imports that they believe are being “dumped” at below-market prices, they are quick to demand remedies from Washington, usually in the form of punitive tariffs. These days, the alleged culprit is often China.

But try looking at things from south of the border and the picture shifts. There, the culprit is just as likely to be the United States, particularly when it comes to agriculture.

A new paper from Timothy A. Wise at the Global Development and Environment Institute at Tufts concludes that America’s generous subsidies allow farmers to sell their products to Mexico at below-market prices. The cost to Mexican farmers, he estimates, was $12.8 billion from 1997 to 2005. Corn farmers fared worst; American subsidies cost them $6.6 billion.

Despite protests by weathered farmers who periodically march down Mexico City’s main avenue, the government has not responded with tariffs.

Quite the contrary, under the North American Free Trade Agreement, the Mexican government quickly opened up to American agricultural imports to take advantage of lower food prices. Mexican agricultural subsidies — yes, Mexico also has them — have been channeled to favor large well-capitalized farmers, most critics agree, at the expense of peasant farmers.

What peasant farmers have received has gone toward compensating for United States dumping, rather than helping farmers become more competitive.

Mr. Wise estimates the overall cost to Mexican farmers by looking at what is known as the “dumping margin” for eight products: corn, soybeans, wheat, rice, cotton, beef, pork and poultry. That margin is the difference between the cost of production and the price. He then assumes that Mexican producer prices were depressed by the same amount as the dumping margin.

“How can Mexican farmers compete if U.S. farmers are receiving billions of dollars in government support?” Mr. Wise asks.

The analysis stops in 2005, before commodity prices began their rise. Mr Wise argues, however, that the spike of the past few years is just a temporary halt in long-term trends towards lower prices. Nor, he argues, will it end dumping by American producers because the costs of production are rising faster than prices.

“It would be a mistake to conclude that Mexican producers have seen the end of U.S. agricultural dumping,” Mr. Wise writes.

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