NAFTA 20 years later: Are we better off today? - The Packer

NAFTA 20 years later: Are we better off today?

05/15/2014 08:49:00 AM
Tom Karst

 Despite two serious economic difficulties (the Mexican crisis by the end of 1994 and the financial crisis in the United States in 2008), trade between the two countries has quadrupled since 1994. When NAFTA began, the United States exported roughly $5 billion in agricultural products to its southern neighbor; in 2013, agricultural exports totaled almost $20 billion. In NAFTA’s 20 year span, Mexico has imported over $200 billion worth of agricultural products from the United States. It is worth mentioning that similar growth has been experienced by Mexican agricultural exports to the United States, its main commercial partner, a reflection of the positive benefit of free trade.

 As part of NAFTA’s reshaping of agricultural trade, one noticeable trend is that the United States specialized its exports to Mexico in grains, meat, and dairy products, while Mexico focused on exporting beverages, food preparations, and fresh fruits and vegetables. In this last category, while Mexico continues to register record exports of tomatoes, peppers, cucumbers, watermelons, avocados, citrus, and grapes, the United States has exported almost 3 billion MT of fresh apples (worth $2.6 billion) since the beginning of NAFTA. It is worth mentioning that apples and pears are the only fruit categories that since 1995 have surpassed the $1 billion in accumulated exports to Mexico.

TK: To borrow a phrase from a political campaign, are growers better off under NAFTA? That depends on who you ask. I would suspect most would answer in the affirmative.

There is no doubt that both countries can boast success stories for NAFTA. 

USDA trade figures indicate that U.S. imports of Mexican tomatoes have risen from 376,000 metric tons in 1994 to 1.38 million metric tons in 2013. At the same time, U.S. exports of apples to Mexico have risen from 153,000 metric tons in 1994 to 279,000 metric tons in 2013. But the post-NAFTA era has seen more growth in agricultural exports for Mexico than the U.S. Total U.S. agricultural exports to Mexico have increased from $5.1 billion in 1994 to $19.5 billion in 2013. U.S. imports of Mexican agricultural products have climbed from $3.2 billion in 1994 to $19.1 billion in 2013.

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