Do bilateral free trade agreements with the United States help or hurt the rural poor?
There is a lot of controversy on this topic, with strongly entrenched positions, but in the end it is an empirical question. Countries that have sought or are seeking free trade agreements with the U.S. include Mexico, Chile, the six CAFTA-DR signatories ( Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras and Nicaragua), Colombia (not yet ratified by the U.S.) and Ecuador (suspended). The expected impact on food prices (corn in particular) is toward a decline. Will this help or hurt the rural poor? It depends on which side of the market they are on. The urban poor, the rural landless and also many smallholders are buyers of food. They will benefit. And they are in fact the majority of the poor. Net-seller smallholders will lose and need to be compensated, for example through a decoupled transfer program such as Procampo, which was instituted in Mexico following NAFTA. But the key issue is the ability to respond to the new system of incentives (away from corn and towa
