NAFTA and the Tarahumara: Challenges to Free Trade in Developing Countries

Kimberly D. Joki Alma College

IntroductionThe proliferation of regional trade agreements (RTAs) and the global embrace of

liberalized trade policies are evident. On nearly every continent there are liberalized trade

communities, ranging from the Southern Cone Common Market in South America to the

European Union to the Economic Community of West African States. Noting significant

worldwide gains from trade and consequent development, free trade policy has become a

beacon for economic growth as well as domestic and global poverty eradication.

Recommendations of the Washington Consensus of 1990 and Monterrey Consensus of

2002 have highlighted the importance of liberalized trade in facilitating the flow of

foreign direct investment (FDI), enhancing international financial and technical

cooperation for development, and encouraging domestic mobilization of resources.1

These recommendations have, at first glance, been accurate. There has been an increase

in FDI of more than $863 billion globally since 1979.2 This significant increase has been

accompanied by overall increases in GDP per capita levels and the stabilization of

inflation rates in emerging markets and developing countries.3

These global economic improvements have added momentum to liberalization of

trade, including the promotion of heterogeneous RTAs. The best example of

heterogeneous free trade is the North American Free Trade Agreement (NAFTA), which

has been a free trade area encompassing the entire North American continent since 1994.

In the 12 years since its inception, the NAFTA has led to economic improvements for all 1 John Williamson. “What Should the World Bank Think of the Washington Consensus?” The World Bank Research Observer. Vol. 15, no. 2 ( The World Bank, Aug. 2000), 252-253., Monterrey Consensus of the International Conference on Financing for Development (New York: United Nations Department of Public Information, 2003). 2 The data shows an increase in FDI of $863.077 billion between 1979 and 2005. World Investment Report 1997: Transnational Corporations, Market Structure, and Competition Policy (Geneva, Switzerland: United Nations, 1997), 266. World Investment Report 2006. FDI from Developing and Transition Economies: Implications for Development (Geneva, Switzerland: United Nations, 2006), 299. 3 World Economic Outlook: Financial Systems and Economic Cycles (Washington D.C.: International Monetary Fund, Sept. 2006), 200.

nations involved, but most substantially for Mexico. FDI inflow stocks as a percentage of

Mexico’s GDP has increased from 8.5 percent in 1990 to 27.3 percent in 20054 and GDP

per capita has been increasing.5 Despite its benefits, free trade in Mexico has not been

friendly to all. Income inequality and poverty have remained high, as the poorest in

Mexico are pushed further into poverty.6 Recognizing the social, political, and cultural

implications of deepening poverty, concerns arise regarding the non-monetary challenges

to free trade; more specifically, the effects of the NAFTA on the human components of

Mexico.

To analyze the monetary and non-monetary consequences of heterogeneous free

trade on poor agriculturalists, it is valuable to study the indigenous Sierra Tarahumara as

a microcosm of the issues facing Mexico’s rural poor. Examining the consequences of

the NAFTA as they relate to the Sierra Tarahumara provides valuable lessons regarding

the land, environment, self-development, and discrimination of marginalized populations

under heterogeneous free trade.

Background

The Tarahumara are a soft-spoken people living in the Sierra Madre Occidental

within the state of Chihuahua, Mexico, approximately 300 air miles south of El Paso,

4 World Investment Report 2006. FDI from Developing and Transition Economies: Implications for Development (Geneva, Switzerland: United Nations, 2006), 312.5 GDP in Mexico increased $1,500.00 from 2001 to 2005. OECD Statistics: Mexico, (ON-LINE: 2007) Retrieved 2 April, 2007 from <http://stats.oecd.org/wbos>.6 “Mexico Country Brief: Development Progress,” The World Bank, (ON-LINE: February 2007) Retrieved 31 March 2007 from <http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/LACEXT/MEXICOEXTN/0,,contentMDK:20185184~pagePK:141137~piPK:141127~theSitePK:338397,00.html>.

Texas.7 Indigenous people account for 12 percent of the Mexican population,8 and of that

only 50,000 indigenous Tarahumara exist.9 Since Spanish colonization began in the

1500s, settlers have pushed the Tarahumara west and south into the mountains, and over

centuries these people have voluntarily isolated themselves from Mexican society in

order to maintain their unique culture. This is also reflected within the Tarahumara

culture, where dwellings are intentionally separated from one another. They have gone to

great lengths to remain isolated. However, due to mestizo10 settlement, they live in what

few today would consider to be isolation. Nevertheless, they still strive to preserve

solitude.

This perseverance includes a strong reverence for tradition. Tarahumara culture is

centered on agriculture, particularly the cultivation of corn as it is central in cooking,

husbandry, entertainment, and religious ceremony.11 Despite their perceived isolation

from one another, the Tarahumara have a fortified communal relationship. In each of

their pueblos, the comunidad is a place for meeting and discussion of the relevant

matters, which often takes “the form of a courthouse, jail building . . . or some open-air

site where people may gather conveniently.”12 This sense of community is further

reflected in their approach to land rights—grazing land is communal, an open range.13

The Tarahumara are a quiet, pragmatic people and the degree with which they have

7 Bernard L. Fontana, Tarahumara: Where Night Is The Day Of The Moon, 2nd ed. (Tucson, AZ: The University of Arizona Press, 1997), xvi.8 Rodolfo, Stavenhagen, Report of the Special Rapporteur on the situation of human rights and fundamental freedoms of indigenous people: Misson to Mexico E/CN.4/2004/80/Add.2, United Nations Commission on Human Rights, (ON-LINE: 23 December 2003) Retrieved 4 March 2007 from <http://daccessdds.un.org/doc/UNDOC/GEN/G03/172/95/PDF/G0317295.pdf?OpenElement>, 2. 9 60 percent of the Mexican population is considered mestizo, many of whom would be considered “Indian” by U.S. definition. Mexico, (ON-LINE: 17 March 2007) Retrieved 3 April 2007 from <https://www.cia.gov/cia/publications/factbook/geos/mx.html>. Bernard L. Fontana, xvi.10 A mestizo is a person of mixed decent. Typically, mestizos are a blend of native and European heritage.11 Bernard L. Fontana, 15, 43-47, 54.12 Ibid., 25.13 Ibid., 79.

maintained their culture in the face of adverse change is startling.14 However, there are a

number of issues which, exacerbated by the NAFTA, are threatening the survival of this

indigenous group.

Land and Environment

Land Rights

Traditionally, the Tarahumara have occupied the Sierra Madre Occidental; the

temperate forest of this mountain range is their home. Understandably, when their land is

threatened, they are greatly affected. Before elaborating, a brief history of Mexican

agrarian code is necessary in order to fully grasp the current stress liberalized trade

imposes on the Tarahumara.

The 1917 Constitution of Mexico, in Article 27, originally allowed organized

groups of peasants to hold communal land through the ejido.15 Article 17 even created

legal comunidades, or designated agricultural lands for indigenous peoples who had

traditionally used communal land.16 Despite this constitutional distinction, the legal and

practical differences between the ejido and the comunidad were unclear.17 Over time,

opposition to this system developed, arguing that the ejido was inefficient and this

inability to utilize the capacity of land resources, hurt the nation. In 1991, the

Constitution was amended to allow for the privatization and sale of ejido land.18 The

individualization of land rights was seen as “conducive to profit-maximizing behavior

14 Ibid., 16, 25.15 An institution created in the 1917 Constitution which permitted organized groups of peasants to share rights on communally held land. Merilee S. Gindle, “Reforming Land Tenure in Mexico: Peasants, the Market, and the State,” The Challenge of Institutional Reform in Mexico,” Ed. Riordan Roett (Lynne Rienner Publishers, May 1995), 3916 Ibid., 5417 Ibid.18 Ibid., 39.

and economic efficiency.”19 This privatization has involved the division and renting or

sale of communal land previously held by indigenous communities.20 Since then, little

has changed. There is a continued trend toward privatization of land, presenting problems

for the indigenous and rural poor of Mexico.21

As Grindle predicted in 1995, under the reformed land laws the Tarahumara have

little say in the development and utilization of the land on which they live.22 This is

largely due to the fact that the land is titled under Artemio Fontes, a logger and alleged

drug trafficker in the Sierra Madre Occidental.23 When the land was titled to him, he

overtly excluded over 90 percent of the indigenous community in the formal title.

Because they are not listed in the title, they have few options.24 To compound

Tarahumaran concerns, Fontes has authorized the logging of the Sierra Madre forests,

creating a host of environmental concerns which exacerbate already difficult agricultural

cultivation. The Tarahumara have received assistance from non-governmental

19 Carmen Diana Deere; Magdalena Leon, “Institutional Reform of Agriculture under Neoliberalism: The Impact of the Women’s and Indigenous Movements” Latin American Research Review, Vol. 36, No. 2 (University of Texas Press, 2001), 34.20 Carmen Diana Deere; Magdalena Leon, 34.21 During 1994, the Zapatistas, an indigenous activist group out of Chiapas, led a rebellion. The demands of the Zapatista National Liberation Army (EZLN) concerned the revision of Article 27 and the repeal of the NAFTA. Two years later, the government signed the San Andrés Accord with the EZLN, which grants autonomy to indigenous communities in their forms of living and social, political, and cultural organization.” Significant legislation stemming from the Accords did not come until May of 2001; the Zapatistas suspended talks because the legislation shifted power to state governments, not to the Indigenous people; the Zapatistas viewed the legislation as an “offense to the Indian people.” San Andrés Accords, translated by Rosalva Bermudez-Ballin, (ON-LINE) Retrieved 2 April 2007 from < http://flag.blackened.net/revolt/mexico/ezln/san_andres.html>. James F. Smith, “Mexico’s Indians await self-rule: Indigenous people seek local power from peace process” The Seattle Times (Seattle, WA: 2 April 2001), A5. Ginger Thompson, “World Briefing/ AMERICAS: MEXICO: Rebels say no more talks” The New York Times (New York, NY: 1 May 2001), A6. Carmen Diana Deere; Magdalena Leon, 47.22 Grindle, 51.23 “The Tragic History of the Coloradas de la Virgen” Sierra Madre Alliance Website (ON-LINE: 2007) Retrieved 4 April 2007 from < http://www.sierramadrealliance.org/indigenous-rights/isidrio-history.shtml>.24 Ibid.

organizations, like the Sierra Madre Alliance, which has been aiding in the legal fight

against Fontes’ logging. Presently, there has not been any success in this battle.25

Additionally, any progress to reform existing land laws seems hopeless. Strong

external pressures urge continued privatization through policies, like the NAFTA, and the

recommendations of international organizations. For instance, the Organization for

Economic

Cooperation and Development (OECD) stated in a 2006 report for Mexico that:

The remaining restrictions to private land ownership prevent effective

allocation of a critical asset, inhibit investment and limit the value of land

to those with certified claims. The vast stretches of remaining communal

land restrict development and resource management. . . Shared ownership

of land under the remaining elements of the communal land system is

intended to serve societal needs in the absence of broader social safety

nets that exist in other OECD members. As social policies are developed

to meet these needs, Mexico should move towards eliminating communal

land ownership. . .26

Such advice, coupled with the pressure to remain competitive within the NAFTA,

provides no venue for the Tarahumara to maintain their traditional, communal

agriculture.

Environment

25 “Judge Denies Tarahumara Request to Suspend Logging” Sierra Madre Alliance Website (ON-LINE: December 2006) Retrieved 4 April 2007 from <http://www.sierramadrealliance.org/indigenous-rights/pino-update.shtml>.26 Agricultural and Fisheries Policies in Mexico: Recent Achievements, Continuing the Reform Agenda/ Executive Summary (The Organization for Economic Co-operation and Development: 2006), 11-13.

The Tarahumara continually confront challenges to their habitat—challenges that

they struggle to overcome due to the inaccessibility of land rights for the indigenous

group. The habitat, which the Tarahumara have protected for hundreds of years, is being

subject to intense desertification. The Sierra Madre, a region “once blanketed by tall

pines that sheltered a watershed blessed by seasonal rains,” has been suffering through a

decade of drought.27 This drought has been intensified by extensive logging.28 The

compounded effect of the land title disputes, drought, and deforestation is destroying the

historic habitat of the Tarahumara.

The Tarahumara have minimal say in the management of the natural resources

which have been traditionally theirs. Due to pressure to maintain or fortify private land

rights, the Tarahumara are not included in discussion of forestry management. Similarly,

because of pressure from international economic organizations, Mexico is encouraged to

increase competitiveness by privatizing water rights.29 Without legal rights to water

resources in the Sierra Madre, the Tarahumara are further subject to policy which was

created without appropriate indigenous representation. Again, privatization pressures

stemming from the dynamics of heterogeneous free trade and by organizations promoting

liberal trade are substantially influencing the future of the Tarahumara without directly

dictating any such effects.

Corn Culture

27 Susan Ferriss, “Hard Times in the Tarahumaras: A Fight for Survival (Series: Indian Rights: On Challenges Facing Mexico’s Indigenous People” The Atlanta Journal-Constitution (Atlanta GA: 25 March 2001), F1.28 E.G. Villianatos, “The Indigenous People Should Be Allowed to Rebuild Their Land and Culture” St. Louis Post-Dispatch (St Louis, MO: 1 Nov. 1999), D17.29 Agricultural and Fisheries Policies in Mexico: Recent Achievements, Continuing the Reform Agenda/ Executive Summary (The Organization for Economic Co-operation and Development: 2006), 11.

As an indigenous culture that derives a number of its societal practices and

necessary nutrition from corn, the effect of the NAFTA on corn prices in Mexico has

exacerbated already grave agricultural conditions confronted by the Tarahumara. Prior to

the NAFTA, the Sierra Tarahumara had been battling years of drought due to

complications from deforestation. This battle has continued into the new century.30

Drought, combined with steep hillsides and rocky soil, is providing only a few months-

worth of harvested corn, beans, and other necessary crops.31 As desperation grips the

Tarahumara, they are forced to abandon their subsistence life-style and begin trying to

make money from what little corn has been harvested. Considering these environmental

challenges, it is clear that the fall in corn prices due to the NAFTA has been a significant

obstacle for the Sierra Tarahumara. This steep decline in corn prices has three, more

specific causes: the clear United States’ comparative advantage in corn production32, the

failure of the Mexican government to collect tariff-payments, and the need to seek

income in Mexico by increasing corn production despite falling prices.33

The United States’ agricultural production is clearly the best in the world.

Because of this, it is logical that the U.S. should have the comparative advantage in corn

production when trading with Mexico. This comparative advantage, coupled with U.S.

protectionist agricultural policies, allow U.S. corn exports to be sold at a price lower than

Mexico’s equilibrium price. After the implementation of the NAFTA made trade cheaper

for the U.S., it exported a large amount of surplus corn to Mexico. The ability of U.S. to

30 Ibid.31 Ibid.32 Comparative advantage refers to the advantage conferred on an individual or nation if it can produce a good at a lower opportunity cost than another producer. Paul Krugman; Robin Wells, Economics: Glossary (New York, NY: Worth Publishers, 2006), G-2.33 Gisele Henriques; Raj Patel, “IRC Americas Program Special Report: NAFTA, Corn, and Mexico’s Agricultural Trade Liberalization” Interhemispheric Research Center (ON-LINE: 13 Feb. 2004) Retrieved April 2006 from <http://www.americaspolicy.org/reports/2004/0402nafta_body.html>.

sell an abundance of corn at a significantly lower price than Mexican equilibrium price

encourages consumption of U.S. corn, severely diminishing demand for Mexican corn.

Additionally, this price discrepancy has been enhanced by poor Mexican policy.

The NAFTA allowed Mexico a 15 year grace period to provide Mexican farmers time to

adjust and, within that time, Mexico was set on a graduated plan to increase the free-tariff

quota.34 Instead of waiting until 2008 to accept all corn as tariff-free, Mexico compressed

the 15-year-plan into 30 months, without collecting tariff revenues on the above-quota

corn imports.35 Corn prices plummeted by 48 percent.36 Lastly, the negative effects of

NAFTA were made worse by the lack of market self-correction after prices fell. The

Mexican corn market did not follow basic laws of supply and demand.37 Rather than

decreasing production, Mexican farmers were forced to maintain high production in a

futile effort to make enough money. This was largely the result of the lack of options

available to farmers, the acceptance of corn as a safe crop, the cost of producing

alternatives, and the commitment to culture and tradition.38 And, as the Tarahumara

attempt to supplement survival with miniscule returns from corn sales, their condition

worsens.

The NAFTA has created some serious problems, as more Tarahumara are forced

to abandon corn farming for alternative income sources. In some cases, community

members are leaving for urban jobs; in other cases, the indigenous are turning to drug

34 Ibid.35 Ibid.36 Gisele Henriques; Raj Patel37 In the Microeconomic model, an increase in supply (U.S. imports entering Mexican corn) should shift the supply curve to the right. This shift establishes new, lower price for the good and quantity demanded increases. Initially, suppliers will continue to meet quantity demanded at the new lower price, but a reduction in profits will encourage suppliers to limit production. This ultimately results in a greater quantity of corn in the market at a lower price. For more information see: Paul Krugman; Robin Wells, Economics (New York, NY: Worth Publishers, 2006), 56-79.38 Gisele Henriques; Raj Patel.

trafficking.39 Effectively, the disappearance of Mexican corn, their sacred crop, is

leading to the dissolution of the culture through famine and the inability to sustain

traditional practices.

Self-Development and Discrimination

The Tarahumaran capacity for self-development is extremely limited due to the

effects and pressures from the NAFTA and general discrimination against indigenous

people. As stated earlier, the pressure to privatize in order to remain competitive has led

to property rights belonging to fewer and fewer people. The negative consequences of

this policy toward indigenous people and the lands they occupy severely hinder the

ability of the indigenous to progress toward full recognition of their rights as historically

native people.40

Furthermore, the inability of the Tarahumara to sustain food and resources for

survival, is causing cultural degradation as members seek alternate income via drug

trafficking and leaving to work in the cities. The fact that these consequences are external

and beyond the political scope of the Tarahumara is paramount to understanding why

self-development is so difficult. These soft-spoken people are not given appropriate

avenues for making their concerns known to the Mexican government. And, when they

do successfully make their point through legal proceedings, they are the object of

39 James F. Smith, “Mexico’s Indians await self-rule: Indigenous people seek local power from peace process” The Seattle Times (Seattle, WA: 2 April 2001), A5.40 In late 2002, the Tarahumara won a court injunction that froze logging operations. This glimpse of hope was cut short as Fontes appealed the injunction and succeeded in continuing his logging operations. Since, there has been more of the same; in December of 2006, Tarahumara appeals to halt logging were denied again in court. Diego Cevallos, “Mexico: Indians Caught Up In Perilous Drug-Trafficking Ring,” IPS-Inter Press Service/Global Information Network (4 June 2003). “Judge Denies Tarahumara Request to Suspend Logging” Sierra Madre Alliance Website (ON-LINE: December 2006) Retrieved 4 April 2007 from <http://www.sierramadrealliance.org/indigenous-rights/pino-update.shtml>.

discrimination. That is to say, because their ideals do not coincide with liberal trade

pressures to privatize and utilize the full capacity of their resources, they consistently lack

government support.

If any self-development is occuring, it is through the struggle to preserve the

culture. Since this is difficult to do independently, the Tarahumara work with non-

governmental organizations (NGO) to sustain their way of life. For example, the

Tarahumara are partnered with the NGO, the Alternative Development Center for

Indigenous Groups (CEDAIN), in Chihuahua.41 CEDAIN provides indigenous groups

with opportunities to produce traditional artisan work in exchange for goods to fill basic

needs. The NGO has established barter centers where the Tarahumara can engage in

traditional commerce.42

The importance of CEDAIN’s work should not be diminished; however, programs that

only explore one facet of the Tarahumara culture are not enough to preserve it and move

toward self-development. True cultural preservation and progress toward self-

development needs to occur through elimination of the NAFTA-discrimination against

indigenous culture.

Conclusions: Lessons from the NAFTA and the Tarahumara

The pressures of privatization and competition that flourish under heterogeneous

free trade have profound implications on the lowest class of society—the rural poor. By

analyzing the current situation of the Sierra Tarahumara, it is clear that the NAFTA has

been the source of a number of non-monetary challenges. These include the restriction of

41 “Group aids Mexico’s indigenous people” Albuquerque Journal (Albuquerque, NM: 3 Oct. 2005), 15.42 Ibid.

traditional land and water rights via resource privatization policy; the cultural degradation

that results from agricultural free-trade between dissimilar economies; the implications of

limited or impeded self-development due to inaccessibility to basic property rights; the

development of discrimination based on compatibility with heterogeneous free trade

thought and policy; and the dissolution of traditional cultures. These non-monetary

effects provide important insight into the broader effects of heterogeneous trade.

Through examination of the Tarahumara, it seems evident that monetary

inequality43 arising from liberalization of trade has been paralleled by a non-monetary

dichotomy—a division arising because of the discrimination of ideas, practices, and

cultures which contradict the prevalent support of free trade. Essentially, with economic

trends supporting liberal trade, societies must decide whether to pursue heterogeneous

free-trade enthusiastically, to deny the trend and embrace more traditional ideals, or to

discover, if possible, how to achieve a functional blend of both free-trade and traditional

living.

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