Rural Development Programs in Mexico

RURAL DEVELOPMENT PROGRAMS IN MEXICO

Mr. GRASSLEY. Mr. President, on July 10, the Senate passed an amendment to S. 925, the Foreign Relations Authorization Act, to authorize $100 million for rural development programs in Mexico. This amendment authorizes funding for programs to promote microcredit lending, to promote small business and entrepreneurial development, to aid small farms impacted by the collapse of coffee prices, and to strengthen private property ownership in rural communities.

I understand why Senator REID offered this amendment. Mexico is important to the United States, and it deserves our attention. But I voted against this amendment. Let me explain why.

A better way to improve Mexico's economy, including its rural economy, is not through foreign assistance from the United States, but through trade. As recently noted by the Ambassador of Mexico to the United States, Mexico has been transformed in recent years through trade liberalization, and in particular through the NAFTA.

Mexico's exports to the world grew from $50 billion to $160 billion between 1993 and 2001. Total trade between the United States and Mexico increased from $88 billion to $250 billion between 1993 and 2002.

Mexico's agricultural producers have shared in the benefits of NAFTA. Between 1993 and 2001, Mexican agricultural exports to the United States rose by almost 97 percent. Some 78 percent of all Mexican agricultural exports are shipped to the United States, and the United States is by far Mexico's largest agricultural export destination.

While well intentioned, increased foreign aid from the United States, such as through Senator REID'S amendment, will make little difference to the Mexican economy. Clearly, Mexico's leaders recognize that the best means of achieving a healthier Mexican economy, including Mexico's rural economy, is through continued strong trade ties with the United States.

Regardless, some of these same leaders seem to be losing interest in maintaining strong trade relations between our countries. They are doing this by attempting unilaterally to renegotiate agricultural provisions of the NAFTA.

Mexico has imposed, or threatened to impose, restrictions on the importation of a variety of U.S. agricultural products. These products include pork, beef, corn, and high fructose corn syrup, all of which are major Iowa commodities. I spoke on this situation just last month on the Senate floor, so I will not go into the specifics on Mexico's trade restrictions on these commodities.

Given barriers imposed by Mexico on U.S. agricultural products, now is clearly not the proper time to increase foreign aid to Mexico. Mexico's trade policies are harming farmers in Iowa and other states. Providing more foreign aid to Mexico sends the wrong signal. I realize that Senator REID's amendment to increase foreign aid has already passed the Senate. But until such time as Mexico's agricultural trade barriers are removed, I urge Senators to keep them in mind when voting on any future legislation involving foreign aid for Mexico.

At the same time, I hope that Mexico will realize that by not abiding by its NAFTA commitments, and by thus threatening its trade relations with the United States, it is doing little to improve the lives of rural Mexicans.

In fact, any reduction in trade between our two countries would likely lead to increased economic hardship in Mexico. Such a situation would benefit neither Mexico nor the United States.

Once again, as I did last month, I urge officials in Mexico to consider the effects that Mexico's barriers to imports of U.S. agricultural products are having on overall trade relations between the United States and Mexico. Mexicans, including those living in rural areas, have much more to gain from closer economic ties to the United States than from increased foreign aid.