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Mexico and U.S. to end final trade tariffs

December 29, 2007|From Bloomberg News

Mexico and the U.S. are about to eliminate the last tariffs on goods they trade, prompting opposition by lawmakers and farmers in both countries who anticipate a flood of cheap imports.

In Mexico, farmers plan nationwide protests over what will be the final step in implementing the North American Free Trade Agreement on Jan. 1 and eliminating tariffs on American-grown beans and corn. The U.S. will drop tariffs on flip-flops, glassware and sugar, the most price-sensitive import.

"Back in 1993 when NAFTA was negotiated, 15 years was a lifetime away," said Daniel Erikson, a senior associate at the nonpartisan Inter-American Dialogue in Washington. "But now this is really affecting the most sensitive products."

The free-trade agreement among the U.S., Mexico and Canada created the world's biggest trade bloc, with the exchange of goods and services between the U.S. and Mexico more than quadrupling to $332 billion a year, according to government data.

Critics say the agreement has led to a loss of 1 million factory jobs in the U.S., while subsidized U.S. imports have pushed millions of farmers in Mexico off their land and spurred illegal immigration.

"Mexican agriculture has been a net loser in trade with the United States, and employment in the sector has declined sharply," former Clinton administration official Sandra Polaski testified before the U.S. Senate last year.

In Mexico, protesters plan to form a human wall at main U.S. border crossing points to block grain imports.

"For us, this is an issue of food sovereignty," said Carlos Navarro Lopez, who heads the Rural Development Committee in Mexico's lower house of Congress. "The main goal of the protests is to force the federal government to sit down with the farmer and lawmakers to see how we can seek a renegotiation."

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