Mexico Hopeful Takes Hard Line vs. NAFTA

The Associated Press
Sunday, June 18, 2006; 12:17 AM

TUXTLA GUTIERREZ, Mexico -- Leftist presidential candidate Andres Manuel Lopez Obrador took his hardest line yet against free trade with the United States, saying for the first time Saturday he would not honor Mexico's commitment under NAFTA to eliminate tariffs on U.S. corn and beans.

Tariffs on all agricultural products must be removed in 2008 under the North American Free Trade Agreement. But Lopez Obrador said he won't eliminating tariffs on U.S. white corn and beans if elected, showing no allegiance to a deal he sees as harmful to Mexican farmers.

"We are not going to accept this clause that they signed," Lopez Obrador told supporters in Chiapas, an extremely poor farming state.

He also promised to provide the farmers with guaranteed prices, subsidies and loans on favorable terms, some of which may be questionable practices under NAFTA rules.

With two weeks to go before the July 2 election, the fiery ex-Mexico City mayor is running about even with his main opponent, Felipe Calderon of the conservative governing National Action Party, or PAN.

Mexican farmers say hefty agricultural subsidies in the United States give American white corn and beans an unfair advantage over the Mexican market, which depends in large part on small-scale and mostly subsistence farmers. As Mexico's staple crops, corn and beans also carry immense symbolic importance.

Mexicans worry that if these farmers can't sell the nation's signature crops at a price that competes with trucked-in produce from the United States, they will go out of business altogether.

That could severely damage Mexico's agricultural economy, which farmers say has already suffered since the trade deal went into effect in 1994, forcing many to migrate to the United States.

Mexico's agriculture minister pleaded with Canada and the United States this month to reconsider the removal of the corn and bean tariffs, but U.S. Undersecretary for Agriculture J.B. Penn flatly rejected the appeal, saying "we have no interest in renegotiating any parts of the agreement."

Despite the concern, the administration of outgoing President Vicente Fox has stood by NAFTA, saying Mexico honors its trade commitments.

Lopez Obrador said Fox and the "technocrats who govern our country badly ... do nothing more than copy the bad from abroad."

In contrast, Lopez Obrador has promised to raise the income of poor families by as much as 20 percent by providing them with subsidized power and basic goods, and to extend nationwide the free pensions he established for Mexico City's elderly.

Lopez Obrador said he is confident many Mexicans will vote against his rival Calderon because they are angry with Fox for not fulfilling his campaign promises, which included creating millions of jobs.

Lopez Obrador has promised to raise the income of poor families by as much as 20 percent by providing them with subsidized power and basic goods. He also has promised to extend the free pensions for the elderly he established in Mexico City to the rest of the country.

Lopez Obrador, who lives modestly in a small Mexico City apartment, has said the handouts _ estimated to cost about $7 billion _ would be funded by cutting the salaries of Mexico's army of government workers, particularly of the top earners. He has also promised to draw half the salary of Fox, who received $238,000 last year.

Calderon and other critics say Lopez Obrador's promised social programs would push Mexico into an economic crisis, and in a series of attack ads, compared him to Venezuelan President Hugo Chavez, an authoritarian socialist. But Lopez Obrador says the comparison is ridiculous.

His Democratic Revolution Party has never held the top office, but many claim victory was stolen from the party in 1988 through fraud perpetrated by the then-governing Institutional Revolutionary Party.

© 2006 The Associated Press