Can We Use Trade to Make Us Healthier? A Case Study From Mexico

U.S. exports obesity epidemic to Mexico was the conclusion of a recent Institute for Agriculture and Trade Policy (IATP) report. The study looks at the health consequences of the North American Free Trade agreement (NAFTA), a tri-lateral trade liberalization agreement between Mexico, Canada, and the U.S. that came into effect in 1994. The researchers tracked the increases of U.S. exports into Mexico that followed NAFTA’s implementation. These included such items as soft drinks, snack foods, processed meats, and dairy, as well as raw inputs such as corn and soybeans that are used in the food processing industry. They then linked the rises to increased consumption of unhealthy foods and, thusly, to an incremental rise in the nation’s climbing obesity epidemic.

Mexico’s obesity problem is nothing new, of course. Currently estimated at 61.8 percent, it has tripled in the last three decades. However, up until recently, businesses, media, and policy makers alike have attributed it, and its associated diseases such as diabetes, heart disease, and food related cancers, to poor individual consumption decisions. The IATP’s conclusion that, “facilitated by NAFTA, these exports are one important way in which US agriculture and trade policy influences Mexico’s food system”, adds to a growing body of evidence that international trade policy matters.

It matters not least because it alters the food settings within which people make food choices. “What people eat depends heavily on what food products in their immediate environment are easiest and most accessible,” said IATP’s Dr. David Wallinga. Sugary drinks are a big part of the problem and a good illustration of this principle. In Mexico, and many other countries, following trade liberalization, national and international companies have been able to take advantage of bigger markets and cheap inputs of sugars and sweeteners to underprice healthier alternatives such as bottled water and fresh juice. Meanwhile, lack of laws and regulations against such tactics as advertising and marketing to children have driven demand for the beverages.

As a result, Mexico’s market is a gold mine. For example, it is now the largest consumer of Coca-Cola products in the world (the company sold 172 liters of beverage per capita in 2011, up from 109 liters in 2001). In addition, Coca-Cola’s meteoric rise to becoming “Latin America’s second religion” has been further facilitated by friends in very high places. Its former boss, Vincente Fox Quesada, served as Mexico’s elected President between 2000 and 2006 – the time of NAFTA’s implementation and a coinciding 12 percent rise of obesity across the country.

As the IATP paper asserts, it is thus reasonable to conclude that trade liberalization has facilitated, if not directly contributed, to the obesity problem. But can changes to the trade regime, like IATP’s recommendations to let Mexico tax and regulate the food industry to incentivise healthier food production and distribution and to make ‘improved health’ an international goal of trade liberalization, really help solve it? Professor Barry Popkin at the University of Carolina Population Centre believes they can. “We see small initiatives in several countries around the world”, he told The Development Roast, “due to public health concerns Finland changed their export/import regulation and taxation so that only skimmed milk would come into the country and the South Pacific Islands have implemented a host of tariffs and taxes on junk food,” he continued, “but no major country has taken this on yet – it is a question of political will”.

In Mexico, the political will is certainly rising. The government is panicking about the public purse repercussions of the obesity crisis and is devising a number of non-trade initiatives. A healthy food labeling system is one example, although, according to Professor Popkin who has worked with the Mexican government for a number of years, the proposal has seen a major split within the food industry. It has won the backing of such international players as Kraft, Unilever, and Danone, but faces fierce opposition from Coca-Cola, Pepsi-Co, General Mills, and Kellogg’s.

As with non-trade initiatives, implementing changes to the Mexican trade regime is likely to see major industry opposition from those whose profit levels depend on retaining the status quo. But, it will also likely see support from companies that can benefit from new rules of the game that provide profit incentives for innovation towards healthier foods.

In that sense, it is important to recognize that the current global food systems, which facilitate the global obesity epidemic, are very much human-made; put in place by design through domestic and international policies of large players like the United States. This fact should not be frightening or taken as a vilification of any particular nation. Rather, this knowledge should be empowering. It means that the world has the ability to change course and level the playing field for healthier foods.

The battle will be uphill; there are no guarantees that each person will respond and that everybody’s wellbeing will improve as a result. However, with the world’s health and future economic capacity at stake, is it not the duty of governments, communities, and individuals to try and, as was put by Dr. Anne Marie Thow of the University of Sydney, use trade policy “to help make the healthy choice, the easy choice?”

Do you think that trade policy can impact health? Leave a reply below.

Ioulia Fenton leads the food and agriculture research stream at the Center for Economic and Environmental Modeling and Analysis (CEEMA) at INESAD. 

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