CASE NUMBER:      361
          CASE MNEMONIC:    CHIAPAS
          CASE NAME:        CHIAPAS AND TRADE

 

A. IDENTIFICATION

1. The Issue

     On January 1, 1994 the Mexican State of Chiapas erupted into
an unprecedented political upheaval in reaction to the
implementation of the North American Free Trade Agreement
(NAFTA).  The indigenous people of Chiapas, represented by the
Zapatista National Liberation Army, organized under the
leadership of Subcommandante Marcos, declared war on the Mexican
government on the same day that NAFTA went into effect.  This, in
fact, was not a coincidence.  The rebels, motivated in part by
the fear that United States corn imports would destroy their low-
technology agricultural economy, strategically coincided their
insurrection with the enactment of NAFTA in order to maximize
embarrassment to the Mexican government.

2. Description
 
     The Chiapas uprising occurred at a time when President
Carlos Salinas de Gortari proclaimed that Mexico was on the verge
of becoming a more modernized and industrialized state.  One of
the primary issues with the NAFTA debate was the question of
stability in Mexico and as a result the Chiapas uprising has left
foreign investors wondering if, in fact, Mexico is stable enough
for their investment.  As of January 14, 1995 the rebels had
agreed to a temporary cease-fire, ordering an end to all
offensive operations against political and military targets in
the region for another week.  The cease-fire came after the
Mexican government made a major concession which allowed Bishop
Samuel Ruiz and his National Intermediation Council to mediate
all future negotiations between the Zapatistas and the
government.  

     Since the eruption of the January 1, 1994 armed conflict,
approximately twenty-six thousand displaced people have begun to
return to their districts in the Lacandona region. This
operation, under the supervision of the Federal Army and the
judicial police, has marked the beginning of the Mexican
Governmentþs relocation program.  But as one indigenous person of
the Chiapas noted, "Government officials told us we were going to
receive our land only if we told them who the Zapatista leaders
were." In fact, in order to create a safety zone that would
guarantee peace in Chiapas San Cristobal Bishop Samuel Ruiz noted
that "it would be necessary to have the withdrawal of the Federal
Army from that area as well as to have the cancellation of the
arrest warrants against the Zapatista leaders."  

     In the most recent attempt to end the political upheaval in
the Chiapas region, twenty leaders of different countries and
members of the Peace Council assembled in the second Annual
Assembly for peace, in which they agreed that only a peace
settlement would contribute to Mexico's development.  As a
result, the Federal Government and the members of the Concord and
the Pacification Commission (Cocopa) and the National Mediator
(Conai) have agreed to continue with the process of negotiations
with the Zapatista rebels that was insurrected in January 1994. 

     The state of Chiapas is located in the southern most portion
of the country and has traditionally been known as one of the
most oppressed and poverty stricken regions in Mexico.  The
indigenous population of the Chiapas, comprised mainly of
uneducated Mayan Indians, however, has not been the only
population in Mexico to suffer.  At least ten of its neighboring
states in the region share similar characteristics of poverty,
marginalization of indigenous communities and political
disenfranchisement.  In an attempt to solve this endemic problem,
President Salinas has instituted a program of Solidarity. 
Although the Chiapas have received more Solidarity money than any
other state in Mexico, it has not been sufficient compensation
for the withdrawal of agricultural subsidies in the name of
economic reform in the preparation for NAFTA.

     Land has been the key issue in the economic reform process. 
As a result of the Mexican Revolution and in an attempt to keep
the peasantry under control as well as to win their support, the
government addressed the land issue in Article 27 of the
Constitution of 1917.  The article, "directs the government to
promote conservation, balanced development of the various regions
of the country, improvement of living conditions, in rural as
well as urban areas, and an equitable distribution of the public
wealth."  In order to obtain this equitable distribution the
article "mandates measures to preserve and restore ecological
balance, break up large land holdings, and ensure that all
communities are provided with adequate title to surrounding lands
and waters, taking care not to infringe on the holdings of small
farmers."  However, this law has been ignored in the Chiapas. 
The peasants have continued to be treated as outsiders on their
own land.  President Salinas took office with the intent of
making Mexico a modern, industrialized state.  In order to make
Mexico attractive to foreign investment, Salinas began the
process of reform by first amending Article 27 of the
Constitution.  A result of this, community land could be divided
and either sold or rented.

     The NAFTA negotiations dealt with the final impediment to
economic reform, namely agricultural tariffs.  These tariffs
protected Mexican farmers from cheap U.S. and Canadian grains. 
It was the realization that NAFTA would eliminate this protection
which provided the impetus for a rebellion by the indigenous
population of the Chiapas.  The Mayan Indians of the Chiapas
relied on this protection in order to continue to sell corn,
beans and other products so that they could earn enough income to
buy their own basic necessities.

     The economic reforms that have accompanied NAFTA have had a
wide spread impact on the region.  These reforms have replaced
the traditional subsistence farming of the Mayan Indians with
such products as beef, timber, and oil which can be exported. 
The removal of trees for the export industry will eventually
destroy the rain forest in Mexico which will cause flooding and
soil erosion which in turn will stop up the dams down stream that
provide most of the electricity to Mexico.  Cattle ranching for
the purpose of beef exportation will cause population
displacement in order to create more space for the cattle.  As
the Mayan Indians are pushed further off their land into the
Lacandon rain forest, they will have to adopt such methods as
slashing and burning of the rain forest in order clear land for
their agricultural practices.  As a result, the Mayan Indians and
the peasants will only be able to live off the lands until the
nutrients are depleted.  They will then have to move further into
the rain forest thus repeating the process.  The detrimental
consequence of this process in global warming.

3. Related Cases

NAFTA Case
PETEN Case
TRUCK Case
ECUADOR Case

     Key Words (1): NAFTA

               (2): Agriculture

               (3): Mexico
               

4. Draft Authors: Kimberly L. Mott and Allison L. Housman
                    (September 1996)

B. LEGAL CLUSTER

6. Discourse and Status: DISAGREE AND INPROGRESS 

     Because the Chiapas rebellion is not an issue of legal
proceedings, its discourse is neither a formal agreement nor a
disagreement.  As was mentioned above in the issue portion of
this paper, this is a case in progress and as of this date the
situation has yet to be resolved.  The Zapatista National
Liberation Army and the Mexican government are currently holding
negotiations to attempt to put an end to the year long uprising
in the Mexican state of Chiapas.  The unrest in the country has
driven the markets into a panic causing the massive conversion of
peso holdings into dollars.  As a result of the uprising coupled
with other signs of instability, the Mexican economy is now in
crisis. 

7. Forum and Scope: Mexico and Unilateral
     
8. Decision Breadth: 1

     The United States, Mexico and Canada could all affected by
the Chiapas rebellion because it could have potentially damaging
effects on trade between the three countries as negotiated under
NAFTA.  If trade between these three countries is affected by the
instability in Mexico then the situation may lead to a
renegotiation of NAFTA.

9. Legal Standing: SUBLAW

     There have been no laws created in relation to this case but
with the current negotiations between the indigenous peoples of
Chiapas and the government, it is possible that there will be
some new laws established by the Mexican government.  For
instance, one of the reasons for the emergence of the rebellion
was the lack of democracy in Mexican politics.  The Mexican
government has shown some signs of positive reform in the
political system and it is quite possible that new election laws
may stem from the Chiapas uprising.  There also exist the
possibility that the laws regarding land reform will be altered.

C. GEOGRAPHIC FILTERS

10. Geography

     a. Continental Domain: North America [NAMER]
     b. Geographic Site:    Southern North America [SNAMER]
     c. Geographic Impact:  Mexico

11. Sub-National Factors: YES

     There are subnational factors due to the fact that this case
involves the Mexican state of Chiapas.

12. Type of Habitat: Tropical [TROP]

D.  Trade Filters


13. Type of Measure: Import Tax

     Economic reform in accordance with NAFTA have caused the
Mexican government to lift subsidies on agricultural products,
such as corn, in order to prevent barriers to trade. 
Type of Measure:

14. Direct vs. Indirect Impacts: DIRECT

     The impact on trade is direct because the Chiapas rebellion
has the potential to cause the government to change its current
policy of economic reform which in turn would affect the types of
products that would be traded under NAFTA.

15. Relation of Measure to Impact

     The removal of subsidies and tariffs for subsistence
agricultural farming and replacing it with cattle ranching, a
timber industry and oil refineries, has a direct impact on the
resources in Mexico.  As was mentioned above, cutting down the
trees for timber exportation directly, or as is the case for
cattle ranching indirectly, leads to the destruction of the rain
forests and global warming.

     a. Directly Related:     Yes  CORN
     b. Indirectly Related:   Yes
     c. Not Related:          No
     d. Process:              Yes  Deforestation

16. Trade Product Identification:  Corn

17. Economic Data

     Based on information reported in the 1994-1995 World
Resources book, Mexico's total agricultural output was 9,872 and
about 30 percent of the population has been employed in the
agricultural sector.  With the economic reforms implemented under
NAFTA, there may the possibility of significant job loss in the
agricultural sector as Mexico continues on its way to becoming a
modern, industrialized state.

18. Degree of Competitive Impact: MEDIUM

     This case relates to the removal of barriers with the
intention of making Mexican goods more competitive with the
United States and Canada.  Because of the recent nature of this
case it is too early to tell exactly how competitive those goods
will be.

19. Industry Sector:  FOOD

20. Exporter and Importer:  USA and MEXICO

21. Environmental Problem Type: Deforestation

     The case applies to the problem of deforestation because as
the Indians are forced off their land to make room for the new
exportable commodities such as beef, timber and oil, they are
forced to move further into the Lacandon rain forest, slashing
and burning the vegetation as they migrate.  The Indians are able
to grow crops on land for a few years until the nutrients are
depleted.  They will then move further into the forest repeating
the same activity which in turn will destroy the forest.  The
Lacandon rain forest is located at a high altitude, therefore by
destroying the vegetation, which acts as a sponge controlling the
release of water from the mountain, the land will become too
saturated for the growth of any products.  This will cause floods
and soil erosion, which will block the dams downstream that
provide most of the electricity to Mexico.

22. Species Information

23. Impact and Effect: MEDIUM and STRUCTURE

24. Urgency and Lifetime: MEDIUM and 100s of years

     If the deforestation is not contained, the wildlife in the
rain forest will face destruction.

25. Substitutes: LIKE products

     This case could possibly apply to the development of
synthetic alternatives for oil, greater conservation efforts for
timber and switching to like products for beef.

E.  OTHER FACTORS

25. Culture: No

26. Human Rights:  Yes

     There have been many reports of human rights violations in
relation to the Chiapas uprising.  For instance, in the city of
Ococingo where the fighting was the heaviest, reporters found the
bodies of five rebels that had their hands tied and were shot
execution style by the army.  There were also claims that the
army was responsible for the death of many civilians, including
numerous infants.  The army has come under strict criticism for
their use of excessive force in attempting to repress the
uprising.  However, it has not only been the army, but also the
rebels themselves that have been responsible for the death of
civilians.  There has been an undetermined number of
disappearances and executions.  Some International and Mexican
human rights violations have been endemic in Latin America and
Mexico is no exception.  However with NAFTA, Mexico has come
under the watchful eye of the international community. In fact,
defending human rights in the Chiapas and supporting a peaceful
negotiated solution to the demands of the Zapatistas as well as
calling for reform in Mexico has become the order of the day for
many activist within the United States and elsewhere.

27. Trans-Boundary Issues: No 

28. Relevant Literature

"A Cry From The People."  McLean's 24 January 1994: 42-44.

Calvet, Peter.  "The Indians of Chiapas."  Index on Censorship.
May 1994: 166-170.

"Mexico's Second-Class Citizens Say Enough Is Enough."  The
Economist. 8 January 1994: 41-42.

Nairan, Allan.  "After NAFTA: Chiapas Uprising."  Multinational
Monitor. January 1994: 6-9.

Reding, Andrew.  "Chiapas in Mexico."  World Policy Journal. 
Spring 1994: 11-24.

Serrill, Michael S.  "Zapata's Revenge."  Time Magazine.  17
January 1994: 32-34.

Smith, Geri.  "The Guns of NAFTA: From Mexico's Wretched, A
Bloody Dissent."  Business Week.  17 January 1994: 47.

The Houston Chronicle.  All articles pertaining to Chiapas
written between January 1994 and January 1995 (Lexis/Nexis).






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