NAFTA and Corn

Corn is a pretty solid source of food. You can make cornbread. You can have corn on the cob and you can have corn off the cob. You can eat popcorn or you can have the variety of foods that have high fructose corn syrup. I promise this post will not all be about the ways you can prepare and eat corn, but it’s necessary to demonstrate how important of a food source it is (did I not mention that this is a food blog now?). Here’s another combination: NAFTA and corn!

The United States produces a whole bunch of corn (heh). According to Index Mundi, in 2016, they produced 386,758,000 metric tons of corn, 14.6% which was exported to other countries and 8.1% which was consumed domestically. The New York Times does a neat job outlining this, but Mexico consumes quite a bit of corn from the United States. Corn coming from the United States to Mexico added up to $2.6b this past year and even though it is a small percentage of the total $525b traded between the two countries, it is an important product as a representation of the two countries trading relationship.

Now, since President Trump has been so keen on reworking NAFTA to help the United States, Mexico seems to be fighting back. They are looking to buy their corn from different countries like Brazil and Argentina. Mexico would also be increasing production domestically and hurt the United States as Mexico is the United States’ highest importer of corn. Not only would it hurt them economically, but the image that the countries have built through their trading would take a hit because of the change in exporting and could affect their relationship down the road. The NYT has a good tidbit on this subject:

Mr. Trump has repeatedly asserted that Mexico has been the big winner under Nafta, and the United States the loser. But many leaders in the agricultural and food industry in the United States — not just in the corn market — hope Mr. Trump does not disrupt the agreement too much.

“When you mix politics with economics, you hope that economics influences your political decisions and not vice versa,” said Luis A. Ribera, associate professor of agricultural economics and director of the Center for North American Studies at Texas A&M University.

Even though Trump has relaxed his talk overall about completely restructuring NAFTA, it’ll be intriguing to watch if Mexico continues to stand strong against a restructure.

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