NAFTA Gets Real
U.S. and Mexican officials met Jan. 10 in Mexico City to discuss the North American Free Trade Agreement (NAFTA), which was fully implemented on Jan. 1 of this year.
"NAFTA has been a positive force for our respective agricultural sectors, creating not only dramatic growth in two-way agricultural trade, but providing our farmers, ranchers, and processors with the potential to take advantage of new export opportunities, while providing a clear and certain path to enhanced trade," said Mark Keenum, USDA under secretary for Farm and Foreign Agricultural Services. "The purpose of this meeting was to ensure that full implementation of NAFTA continues to move smoothly."
Keenum and James Murphy, assistant U.S. Trade representative for agricultural affairs, led the U.S. delegation. "We noted that full elimination of all duties in our bilateral trade is a reason to celebrate and to look forward to more successes," said Murphy. "At a time when we see rising prices for many commodities, open trade between Mexico and the United States also provides benefits for our consumers."
Canada and Mexico are the No. 1 and No. 2 export markets for U.S. agriculture, respectively. In fiscal year 2007, two-way agricultural trade between the U.S. and Mexico was valued at a record $22.2 billion, a nearly four-fold increase over fiscal 1993 — the year preceding the implementation of NAFTA — when two-way trade was valued at $6.4 billion. In fiscal 2008, USDA predicts two-way trade will continue to accelerate to $24 billion, an 8 percent increase.
Julio Hernandez, U.S. Grains Council’s acting director in Mexico, said despite contrary reports, there is no crisis in Mexico stemming from NAFTA’s full implementation. In fact, Hernandez said corn farmers in Mexico are getting the best price in history for their products. In addition, he said NAFTA has eased a looming crisis regarding the availability of corn, which significantly increased the price of tortillas over the last year or more for the Mexican consumer. "We are now getting all the corn we need, which is leveling the price of food and feed for Mexican farmers and consumers."
(Sources: USDA, U.S. Grains Council)