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Mexican Agriculture in the Free Trade Agreement: Transition Problems in Economic Reform

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  • Santiago Levy
  • Sweder van Wijnbergen

Abstract

Should Mexican agriculture be liberalized? If so, how fast should this be done, and what policies should accompany the transition? We use Mexican agriculture as a case study to analyze the transition problems that arise in most major economic reforms. We focus on the implications for policy design of the absence of efficient capital markets; on the welfare costs of reforming only gradually; on incentive problems created by trade adjustment policies; and on the redistributive aspects of policy reform in the presence of realistic limits on available policy instruments. Our key point is that adjustment should focus on increasing the value of the assets owned by the groups affected, and not on direct income transfers or programs targeted on output or other characteristics controlled by the beneficiaries. We target adjustment on what people have, as opposed to what people do ... L'agriculture mexicaine doit-elle être libéralisée ? Dans l'affirmative, à quel rythme la libéralisation doit-elle être menée et quelles sont les mesures qui doivent être prises pendant la période de transition ? L'exemple de l'agriculture mexicaine est utilisé comme étude de cas pour l'analyse des problèmes provoqués par toute période de transition lors de la plupart des réformes économiques d'importance. L'analyse porte sur les conséquences, pour la mise en place des politiques, de l'absence de marchés de capitaux efficaces ; sur les coûts, pour le bien-être social, d'une réforme graduelle ; sur les problèmes d'incitation créés par les politiques d'ajustement des échanges ; enfin, sur les aspects redistributifs de la réforme de la politique là où il y a des limites sur les instruments de politique existants. L'argument central est que l'ajustement doit s'attacher à l'augmentation de la valeur des avoirs détenus par les groupes concernés et non aux transferts directs des revenus ou ...

Suggested Citation

  • Santiago Levy & Sweder van Wijnbergen, 1992. "Mexican Agriculture in the Free Trade Agreement: Transition Problems in Economic Reform," OECD Development Centre Working Papers 63, OECD Publishing.
  • Handle: RePEc:oec:devaaa:63-en
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    File URL: http://dx.doi.org/10.1787/856518560383
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    1. repec:wsi:wschap:9789813108448_0004 is not listed on IDEAS
    2. Richter, Susan M. & Taylor, J. Edward, 2005. "Policy Reforms and the Gender Dynamics of Rural Mexico-to-U.S. Migration," Working Papers 190909, University of California, Davis, Department of Agricultural and Resource Economics.
    3. Antonio YUNEZ NAUDE & J. Edward TAYLOR, 2006. "The Effects Of Nafta And Domestic Reforms In The Agriculture Of Mexico: Predictions And Facts," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 23, pages 161-186.
    4. Susan M. Richter & J. Edward Taylor & Antonio Yúnez-Naude, 2007. "Impacts of Policy Reforms on Labor Migration from Rural Mexico to the United States," NBER Chapters,in: Mexican Immigration to the United States, pages 269-288 National Bureau of Economic Research, Inc.
    5. Harris, Rebecca Lee, 2001. "A computable general equilibrium analysis of Mexico's agricultural policy reforms," TMD discussion papers 65, International Food Policy Research Institute (IFPRI).
    6. Richter, Susan M. & Taylor, J. Edward & Yunez-Naude, Antonio, 2005. "Gender Impacts of U.S. Immigration Policies," 2005 Annual meeting, July 24-27, Providence, RI 19403, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    7. Steven J. Matusz & David G. Tarr, 2017. "Adjusting To Trade Policy Reform," World Scientific Book Chapters,in: Trade Policies for Development and Transition, chapter 4, pages 77-114 World Scientific Publishing Co. Pte. Ltd..
    8. Avalos-Sartorio, Beatriz, 2006. "What can we learn from past price stabilization policies and market reform in Mexico?," Food Policy, Elsevier, vol. 31(4), pages 313-327, August.
    9. Dani Rodrik, 1993. "Trade and Industrial Policy Reform in Developing Countries: A Review of Recent Theory and Evidence," NBER Working Papers 4417, National Bureau of Economic Research, Inc.
    10. Materer, Susan M. & Taylor, J. Edward, 2003. "Cafta And Migration: Lessons From Micro Economy-Wide Models And The New Economics Of Labor Migration," 2003 Annual meeting, July 27-30, Montreal, Canada 21976, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    11. Taylor, Edward J. & Yunez-Naude, Antonio & Paredes, Fernando Barceinas & Dyer, George, 2004. "Transition Policy and the Structure of the Agriculture of Mexico," 2004 NAAMIC Workshop I: North American Agrifood Market Integration: Current Situtation and Perspectives 163857, North American Agrifood Market Integration Consortium (NAAMIC).
    12. Taylor, J. Edward & Yunez-Naude, Antonio & Hampton, Steve, 1999. "Agricultural Policy Reforms and Village Economies: A Computable General-Equilibrium Analysis from Mexico," Journal of Policy Modeling, Elsevier, vol. 21(4), pages 453-480, July.

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