Currently browsing posts about: Mexico

I was interested to see what BakeryandSnacks.com had to say about PepsiCo’s investment in Mexico.

This company, which makes ultra-processed drinks and snacks, plans to invest $4 billion in Mexico over the next two years.

The $4 billion will be spent on “four strategic areas:”

• Improved supply chains for potatoes, corn, and sugar, purchased from small, medium and large producers ($1 billion).
• Improved nutrient profile of PepsiCo products (the total is unspecified but $13 million will go to reducing saturated fats).
• Reduced CO2 emissions and increased renewable energy (amount unspecified).
• Strengthened development programs focused on water, recycling, nutrition and the empowerment of women (> $7 million).

This is on top of the $5 billion Pepsi invested in Mexico in 2014 for “product innovation, brand consolidation, infrastructure, sourcing, and community outreach.”

Pepsi has a big operation in Mexico.  It claims the new investment will add 3000 jobs to the 80,000 it already employs there.

What is this about?  In 2017, Mexico’s $3.6 billion in sales represented nearly 6% of PepsiCo’s total global net revenues of $63.5 billion.

I’ll bet Pepsi sees plenty of room for growth.  I do too, but also in the prevalence of obesity and related chronic disease.

President Trump’s threat to close the border with Mexico will have a major effect on one beloved food: avocados.

Thanks to the USDA’s Economic Research Service, the impact we can expect is obvious from this one chart:

US production has not changed much since 1990 or so.  If anything, it has dropped in recent years.

Pounds of avocados available per capita have increased from less than one in 1990 to more than seven pounds now.  That’s the pounds available to every man, woman, and baby in the country, less exports, plus imports.

All of the increase comes from imported avocados.

Of imported avocados, more than 89 percent come from Mexico.

Reuters says if the border closes, we run out of avocados in three weeks.

The Washington Post says if the border closes, avocados could be—toast (I’m quoted).

Ouch.

The basic agreement does not say much about agriculture, but the Trade Representative has produced a separate fact sheet for agriculture.

The White House says:

The agreement specifically addresses agricultural biotechnology to keep up with 21st Century innovations. And we mutually pledge to work together with Mexico to reduce trade-distorting policies, increase transparency, and ensure non-discriminatory treatment in grading of agricultural products.  This is nothing short of a great victory for farmers and ranchers because…Mexico has historically been a great customer and partner.

And then comes the kicker:

We now hope that Canada will see the need to settle all of the outstanding issues between our two nations as well, and restore us to a true North American Free Trade Agreement.

According to Politico,

Trump warned that efforts to revamp the 24-year-old pact could result in two different agreements, and threatened Canada with tariffs on automobiles if Ottawa didn’t agree to negotiate “fairly.”

Mexico’s president must be worried about Canada.  In a phone call with Trump, he said:

It is our wish, Mr. President, that now Canada will also be able to be incorporated in all this.  And I assume that they going to carry out negotiations of the sensitive bilateral issues between Mexico — rather, between Canada and the United States.

According to the New York Times, Canada is scrambling to get in on the deal.  Why?  Three-quarters of its exports go to the U.S., and automobile supply chains are at issue.

Also according to the New York Times, Congress calmed things down a bit and the White House is giving Canada more time to figure out how to handle all this.

According to Vox, here’s how that happened.

Trump argues that NAFTA has been bad for the United States.  That is unlikely.  It’s been much worse for Mexico (see, for example, Alyshia Gálvez’s Eating NAFTA: Trade, Food Policies, and the Destruction of Mexico, out next month).

Thanks to The Hagstrom Report for providing these documents:

• Office of the US Trade Representative: United States-Mexico Fact SheetModernizing NAFTA to be a 21st Century Trade Agreement
• Office of the US Trade Representative: United States-Mexico Fact Sheet: Strengthening NAFTA for Agriculture
• White House — Remarks by President Trump in Phone Call with President Peña Nieto of Mexico on the United States-Mexico Trade Agreement
• White House — What They Are Saying: Support for President Donald J. Trump’s Trade Announcement with Mexico
• The Washington Post — Trump announces separate U.S.-Mexico trade agreement, says Canada may join later
• Informa Agribusiness Intelligence— Economic Impact of Retaliatory Tariffs from Mexico and China on the US Dairy Sector

I haven’t said anything about NAFTA since August, but events are moving so quickly in the Trump administration’s attempts to undo this trade agreement with Canada and Mexico that I’m having a hard time keeping up (Politico Morning Agriculture helps).

Also fortunately for anyone interested in this issue, the Haynes and Boone law firm has created the “NAFTA Renegotiation Monitor.”  This tracks the countries’ positions on more than 30 issues under debate. I’m particularly interested in agricultural and phytosanitary (translation: food safety) issues, but this is a great place to find out about any any of them.  This Monitor makes clear what is at stake:

According to Politico,

Trump has vowed to withdraw from the 23-year-old agreement altogether. That would usher in the new isolationist era that he has long threatened, potentially endangering tens of thousands of American jobs that depend on cross-border agreements for everything from manufacturing automobiles to the export of beef… officials made clear they were at an impasse on a number of changes specifically sought by the Trump administration that dovetail with its “America First” agenda. As a result, Canada, Mexico and the United States have agreed to delay their next round of talks by nearly a month 

The National Association of State Departments of Agriculture (NASDA) and similar groups in Mexico and Canada issued a joint statement calling on their governments to make sure that whatever gets done to NAFTA does not hurt agriculture.

Politico reports that 86 food and agricultural industry groups say that if the Trump administration really does ask Congress to withdraw from NAFTA to pressure Canada and Mexico into meeting U.S. demands (as it has threatened to do, then it risks causing substantial harm to the U.S. economy: “Contracts would be canceled, sales would be lost, able competitors would rush to seize our export markets, and litigation would abound, even before withdrawal would take effect.”

Furthermore, a NAFTA withdrawal would affect specific agriculture sectors.  These effects are outlined in a letter to Commerce Secretary Wilbur Ross signed by numerous agriculture organizations.

• Poultry: In 2016, U.S. poultry exports were 7.95 billion pounds, over 16 percent of total production. Canada was the second-largest market for the chicken industry and in the top five for turkey. Almost 70 percent of U.S. exports of turkey go to Mexico.
• High-fructose corn syrup: U.S. exports to Mexico would decrease by $500 million per year.
• Fruits and veggies: Canada and Mexico account for 18 percent of U.S. fresh fruit exports and 60 percent of U.S. fresh vegetable exports. Since 1993, fruit and vegetable exports from the U.S. to Mexico and Canada have more than tripled, totaling $7.2 billion.
• Beef: In 2016, U.S. beef exports to Mexico and Canada exceeded $1.7 billion and accounted for 27 percent of total U.S. beef exports.
• Dairy: Over $1 billion a year in U.S. dairy products are shipped to Mexico.

In other words, food and agriculture groups view NAFTA as good for US agriculture.  They do not view it as so broken that it needs fixing.

I can’t believe that I am writing about sugar policy again.  The Trump Administration has just gotten a preliminary agreement with Mexico about the sugar it exports to us.

Mexico says OK, (1) it won’t make us pay as much for it, and (2) it will restrict how much refined (white) sugar it sends.

This is great for U.S. sugar processors who turn raw sugar into white.  They want Mexico to send raw sugar so U.S. processing plants stay busy.

But food and beverage companies making products will have to pay more for sugar.  They belong to the Coalition for Sugar Reform, which is not happy about the agreement.

Under NAFTA, Mexico could sell unlimited amounts of sugar to us.   But our domestic sugar producers complained the Mexicans were “dumping” subsidized sugar and undercutting their prices.  In retaliation,

• We threatened to impose tariffs.
• Mexico threatened to stop buying our high-fructose corn syrup (it currently buys 80% of our HFCS).

Three years ago, we got Mexico to agree to set minimum prices and limit the amount of sugar it sells to us.  The new arrangement confirms that deal, at least for the moment.

As for us public health types, sugar policy is endlessly weird.  Domestically, we don’t produce enough sugar to meet demands so we have to import sugar from other countries.  We keep domestic prices high through quotas, buy-backs and price-support loans.  This ought to discourage consumption, but does not.

How come?  Because the higher price, amounting to billions a year overall, works out to only about $10 per year per capita.

This is not high enough to:

• Reduce sugar consumption
• Improve health
• Generate outrage

Want to read more about this?

• The  US International Trade Commission did a report in 2011 stating that a liberalized sugar trade policy would increase food sales.
• The American Enterprise Institute says higher sugar prices cost Americans almost $3 billion a year.
• Reuters: Coke, Cargill enter fray as sugar dispute threatens Mexico trade 
• Nasdaq: U.S., Mexico closer to sugar trade deal: Mexican economy minister 
• Mexican News Daily:  US sugar industry accused of lying

Who knew that such things existed, let alone that they would be directed at anti-obesity and pro-soda tax advocates.

The New York Times reports that frightening messages about their families (the article gives examples) were sent to the advocates with links

laced with an invasive form of spyware developed by NSO Group, an Israeli cyberarms dealer that sells its digital spy tools exclusively to governments and that has contracts with multiple agencies inside Mexico, according to company emails leaked to the New York Timeslast year.

Supposedly, this Group sells “tools only to governments for criminal and terrorism investigations.”  These can “trace a target’s every phone call, text message, email, keystroke, location, sound and sight.”

As the Times gently puts it, this discovery “raises new questions about whether NSO’s tools are being used to advance the soda industry’s commercial interests in Mexico.”

Citizen Lab has more information about this situation.

The spyware targeted these individuals:

• Dr. Simon Barquera is a well-respected researcher at the Mexican Government’s Instituto Nacional de Salud Pública (National Institute of Public Health).
• Alejandro Calvillo is the Director of El Poder del Consumidor, a consumer rights and health advocacy organization.
• Luis Encarnación is the Director of the Coalición ContraPESO, a coalition of more than 40 organizations that work on obesity prevention and reduction strategies.  All three individuals work to support Mexico’s soda tax.

I am leaving on Wednesday for three weeks on a Fulbright to the National Institute of Public Health in Cuernavaca and hope to find out a lot more about this.  Stay tuned.

In the meantime, here’s a tweet from someone I don’t know (I like the soda cans).

Late addition:  Gary Ruskin sends his paper on corporate espionage against nonprofit organizations.  

Sarah Bowen.  Divided Spirits: Tequila, Mezcal, and the Politics of Production.  University of California Press, 2015

This remarkable book, a recent addition to UC Press’s series on California Studies in Food and Culture, uses drinks distilled from roasted, fermented agave as a basis for entering into debates about production and protection of indigenous food products in the face of globalization.

In recent years, traditional foods and drinks have emerged as profitable and politically salient alternatives to the perceived homogenizing effects of globalization.  Initiatives like the Slow Food movement and DOs [denomination of origin] attempt to rescue eating establishments, dishes, and products from the flood of standardization engendered by the industrial food system.  In doing so, they strive to support the rural communities, farmers, and processors involved in the production of traditional products.  And yet, as my research shows, efforts to regulate Mexico’s iconic spirits illustrate the limitations of relying on alternative markets to protect food cultures and the livelihoods of those who produce them.  My work demonstrates how cultural symbolism can be manipulated to perpetuate and deepen long-standing inequalities along global commodity chains.

Or, as she explains much later, “the right to define what constitutes ‘tequila’ and ‘mezcal’ extends as much from market power and it does from a sense of tradition or justice.”

Consider this book with your next Margarita.

Yesterday, I received this ALERT from health advocates in Mexico:

Big Soda negotiates behind doors with PRI to reduce Mexican SSB tax to 5% for drinks with 5 grams of added sugars per 100ml– Public health advocates denounce conflict of interest and speak out in defense of the tax

Yesterday Mexico’s Congressional Finance Committee proposed and voted in favor of an alarming measure to reduce the rate of the current 10% sugar-sweetened beverage tax to 5% on products with 5 grams of added sugar or less per 100 milliliters. The measure was pushed through committee vote with a reservation from only one political party and moves on to a vote in the lower house within the next 24-48 hours. Beverages with more than 5 grams of added sugar per 100 milliliters would continue to be taxed at 10% (1 peso per liter).

A columnist in one of Mexico’s most prominent dailies indicates that this negotiation between the FEMSA Coca-Cola bottling company and the PRI political party (current administration and majority vote holder in Congress and Senate) came about after attempts at a food and beverage industry negotiation with the PRI, seeking to reduce Mexico’s SSB and snack taxes. The columnist says Bimbo (&the food industry) was eventually excluded from this negotiation to focus on an attainable goal of reducing the SSB tax. (See column in Spanish: http://www.dineroenimagen.com/2015-10-19/63221 )

After several recent press conferences and an act in Congress “to trap” industry lobby mosquitos (Oct 6), continuing to call for an increase to a 20% SSB tax in accordance with national and international expert recommendations, and warning the public and decision makers of industry lobby, today civil society advocates –the Nutritional Health Alliance and ContraPESO– published a full page ad in Mexico’s most important daily asking whether legislators are on the side of public health or soda industry interests and calling on them not to cede to the industry lobby.

In the ad (see translation below and image attached), advocates warn that the most currently consumed 600 ml sugary drink on the Mexican market that has 5 grams of sugar per 100 milliliters contains 30 grams of sugar, above the WHO’s new guidelines for healthy living.

The language of the initiative to reduce the tax recognizes the SSB tax as a public health measure and the progress made, yet proceeds to reduce the tax far below the expert recommended rate, representating a setback to Mexico’s landmark tax.

FYI: Although Mexico’s lower house of Congress (Chamber of Deputies) holds authority over final budget decisions on income, Mexican legislative process entails that the budget package, once voted in the lower house, passes to the Senate for review and a vote, before passing back to the lower house for final approval.

TO SUPPORT MEXICAN ADVOCATES:
Tweet indignation over industry back-door negotiation and support for the current tax and need for an increased tax: #ImpuestoAlRefresco
Press interviews: contact comunicacion@elpoderdelconsumidor.org
If you or your association can emit a declaration or letter of support, send to:
comunicacion@elpoderdelconsumidor.org
desarrolloinstitucional@elpoderdelconsumidor.org

PUBLIC HEALTH ADVOCATES IN MEXICO – Ad in Reforma newspapers OCT 19, 2015 – IN DEFENSE OF MEXICAN SSB TAX. Translation:
Members of Congress:

Have you let yourselves be bitten by the sugar-sweetened beverage lobby mosquitos?:

Do you serve soda industry or public health interests?

– The tax on sugar-sweetened beverages is 10% (1 peso) and not 20% (2 pesos) per liter as recommended by international and national organizations.

– The proposal to lower the tax to 5% to beverages with 5 grams or less of sugar per 100 milliliters acquiesces to soda industry interests, which are the parties mainly responsible for the collapse of public health in Mexico.

– The most consumed 600 milliliter drink in Mexico has 5 grams of sugar for every 100 milliliters contains 30 grams of sugar (6 spoonfuls).

– This surpasses the 25 grams (5 spoonfuls) that the World Health Organization establishes as a maximum amount of added sugars per day in order to preserve one’s health. (1)

– Sugar is not an essential nutrient and there is solid evidence showing that its consumption is harmful to health, contributing to overweight, obesity and caries, serious public health problems in Mexico.

Sugar-sweetened beverages kill more Mexicans a year than organized crime. (2)

Whose side are you on?

DO NOT GIVE IN TO INDUSTRY PRESSURE!

Show that you work to protect the public health of the Mexican population and not Big Soda’s profits.

We demand that the special tax be preserved and increased to 20% for ALL SUGAR-SWEETENED BEVERAGES, as recommended by international and national organizations.