On January 1, the last vestiges of protectionism in Mexico are set to expire. Protective tariffs on corn, beans, and powdered milk — the final strings attached to the North American Free Trade Agreement, or NAFTA — that Mexico signed with the United States in 1994, are about to come off. That is, if the country can stomach the political indigestion.

So far, there have been some serious rumblings. A coalition of farmers, small producers, and anti-poverty and environmental groups have launched a campaign called “Sin Maiz, No Hay Pais,” or “No Corn, No Country,” to protest the end of the tariffs. Invoking Mexico’s cultural heritage and “food sovereignty,” they are demanding that the Mexican government renegotiate the terms of NAFTA to strengthen its protective tariffs. A spokesman for the campaign, Victor Suarez, recently told the Mexican newspaper El Financiero: “Just as the United States holds NAFTA in the third tier of its laws — above it are federal laws and the Constitution — and based on this they have protected their economy and their interests, we demand that the [Mexican] government exercise its authority in the same way.”

The protection Mr. Suarez was referring to is most likely the $8.8 billion the U.S. government spent on corn subsidies in 2006. (The next largest payment was a mere $578 million, for grain sorghum.) Congress is writing a new five-year farm bill to take effect in 2008, and it’s showing no signs of turning off the spigot, even though the ethanol boom has driven corn prices to record highs, calling into question whether corn farmers are in the kind of peril that requires help from the taxpayer to survive. (Although, there is doubt as to how sustainable those prices are).

Such sweet milk from the government’s teat has had deleterious effects on rural Mexican communities. U.S. farmers and agribusiness companies like Archer Daniels Midland and Cargill can sell corn at prices below the actual cost of production, undercutting significantly the profitable price for corn produced in Mexico. The distorted competition has made corn, the foundation of pre-Columbian society in Mexico, an economically unsustainable crop. A 2003 study by Oxfam found that a typical corn producer in Puebla, Mexico, earned $400 for his crop the previous year, while costs of production ranged from $460 to $520.

Cost savings for consumers, the great promise of free trade, did not follow. The same Oxfam report showed that while the price of Mexican corn dropped precipitously, the price of corn tortillas in Mexico rose from 1994 to 1999, even as cheaper imports were gaining market share. Somebody was reaping the benefits, but it wasn’t Mexican farmers or consumers. The main exporters of subsidized U.S. corn, Cargill and ADM, also own stakes in Mexico’s two main tortilla and flour-processing companies: Manseca and Minsa. So, they’re not only driving down Mexican corn prices with ultra-cheap exports, they also take a cut of the profits culled from the lower input cost. Some would say this is simply shrewd “vertical integration — ownership of the buyers of commodities and sellers of the products of those commodities to increase efficiency and cut costs – but I would argue that it’s a sweetheart deal in a trade agreement that was supposed to level the playing field.

Why should anyone north of the Rio Grande care about the plight of Mexican farmers? Well, our current immigration crisis is in no small part due to the influx of Mexican farmers who can no longer make a living at home growing corn, beans, or other crops, because they have been drowned out by artificially cheap U.S. imports. Secondly, the intransigence of the U.S. government in reducing its own protective tariffs even as it negotiates aggressively with its trading partners to eliminate theirs, has done significant damage to America’s reputation. And it’s beginning to enter the consciousness of U.S. voters. Even now that the dollar is falling and exports are high, U.S. citizens seem to be connecting globalization with the loss of manufacturing jobs, and the pain they are feeling will not be soon forgotten.

The passage of time and shift of political winds at home has given U.S. citizens a chance to reflect on the true costs and benefits of our trade agreements thus far. As we shape a policy for the 21st century, we clearly need to be more sensitive to the losers — be they American autoworkers or Mexican corn farmers — instead of papering over them. If we want to maximize the benefits of globalization for everybody, we have to listen to the cries of those being crushed, not just turn world markets into a candy store for multinational corporations.

We should do this not just out of goodwill, but because in this increasingly small world, the consequences will be felt by us all.

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