NAFTA helps push obesity epidemic south of the border

by Amy Damon, Assistant Professor of Economics and Latin American Studies, Macalester College

The obesity epidemic in the United States has received notable attention, and rightly so since approximately 70 percent of adults in the United States are either overweight or obese.  Some will be surprised to learn, however, that Mexico is quickly catching up to the United States in this unfortunate race.  In 2010, Mexico ranked second, only behind the United States in obesity prevalence according to the OECD with nearly 39 percent of the adult population being obese and an additional 30 percent overweight.  What is the anatomy of this epidemic?  Are the causal factors the same in both countries?  Clearly rising incomes, urbanization, changing lifestyles and diets all play a role, but how does the globalization of the food system, in particular, affect obesity rates?  

 
In a new paper "Exporting Obesity: How U.S. Farm and Trade Policy is Transforming the Mexican Consumer Food Environment" the authors explore how trade relations between the United States and Mexico, particularly since the passage of NAFTA, have changed the food environment and possibly contributed to the rise in obesity rates in Mexico.  In the years following NAFTA, exports of corn, soybeans, meat products, oilseeds and other commodity crops from the United States to Mexico increased significantly.While this trend surely increases the food balance sheet of Mexico, it is unlikely to be the smoking gun behind the rise in obesity.  The more troubling trends, as detailed by the authors, are the increased availability of high sugar and salty snack foods and ready-to-eat meals which have been accelerated by trade.  The United States has a 98 percent share of the import market for snack foods in Mexico.  These imports, along with several domestic snack food manufacturers, have increased to meet a rapidly rising demand for these food items.
 
Another dimension of this story is the important role that foreign direct investment (FDI) plays in the changing landscape of the Mexican food sector.  The United States has aggressively invested hundreds of millions of dollars in all aspects of the Mexican food supply system. This importantly includes investment in food retail outlets, which dramatically change the way that consumers and producers interact.  Wal-mart, for example, controlled 20 percent of the Mexican food retail market in 2006.  FDI has also increased the availability of fast-food outlets such McDonald's, KFC, Taco Bell, etc.  
 
Both FDI and trade liberalization have undoubtedly changed the food landscape in Mexico.  Along with other contributing factors, Mexico's diet has changed dramatically. The authors document a remarkable uptick in refined carbohydrates and sugary beverages both of which contribute directly to unhealthy eating habits and ultimately unhealthy weight.  
 
The obesity epidemic in Mexico, as outlined in this provacative paper gives rise to an important consideration.  We have long talked about the potential deliterious effects of trade, such as undesirable labor conditions, environmental concerns, food safety and many others.  It appears that we need to add health concerns more prominently to this list.  Public health and nutrition cannot be undermined by trade policy and need to be at the forefront of the economic policy agenda.  Clearly it is impossible to isolate a single cause of the obesity epidemic in either the United States or Mexico, but given the magnitude of the problem in both countries we need to think about each and every policy decisions that could affect health outcomes through this prism. This is our new reality.