X hits on this document





6 / 81

in 1993 to $16.6 billion in 2003; Canadian and Mexican agricultural im- ports from the United States increased from about $9 billion in 1993 to $17.2 billion in 2003. 7

US agricultural exports to Mexico increased from $3.6 billion in 1993 to $7.9 billion in 2003. US agricultural imports from Mexico likewise in- creased from $2.7 billion in 1993 to $6.3 billion in 2003. US agricultural trade with Mexico thus doubled between 1993 and 2003 (table 5A.2). US agricultural exports to Mexico sharply increased during 1993–2003 in fruit juices (175 percent), vegetables and preparations (267 percent), and grains and feeds (149 percent). Meanwhile, Mexican exports sharply expanded in sugar and related products (595 percent), beverages excluding fruit juices (584 percent), and grains and feeds (328 percent). Mexican horticultural ex- ports to the United States, a large-volume category, increased by nearly 100 percent from $1.8 billion in 1993 to $3.5 billion in 2003. 8

The expansion of US-Mexico agricultural trade in basic products ac- companied the growth of foreign direct investment (FDI) in high-value processed foods. US FDI stock in the Mexican food processing industry more than doubled from $2.3 billion in 1993 to $5.7 billion in 2000. US FDI is concentrated in high-value products such as pasta, confectionery, and canned and frozen meats.

Canada’s agricultural exports to Mexico represented only a small share of Canada’s total food and agrifood product exports. Nonetheless, since 1993, Canadian agricultural exports to Mexico have increased by 149 percent, from $300 million in 1993 to $746 million in 2003 (table 5.1).9 Six key agri- cultural products represent 88 percent of total Canadian agrifood exports to Mexico: meat, dairy, lentils, canary and canola seeds, wheat, and beer.

Sharp trade and investment gains in the NAFTA era do not mean that the agricultural sector, particularly in Mexico, has not had adjustment problems. In the aggregate, however, static and dynamic gains from ex- panded trade under NAFTA auspices probably exceed the adjustment costs within Mexico by a factor of five or higher. Estimates for the United States indicate that GDP gains from globalization amount to about 10 per- cent of GDP and exceed adjustment costs by a ratio of 20 to one (Bradford, Grieco, and Hufbauer 2005). William Cline (2004) concludes that an in- crease in the ratio of merchandise trade to GDP by 10 percentage points ultimately raises the GDP of a representative developing country by about

7. See USDA Foreign Agricultural Service (FATUS) database, 2003; and Canada House of Commons (2002).

8. As NAFTA has eliminated tariffs, SPS restrictions have become the trade barrier of choice in the horticultural sector. NAFTA avoided harmonizing SPS standards. Instead, each NAFTA country reserves the right to determine its own standards necessary to protect con- sumers from unsafe products or to protect domestic livestock and crops from invasive pests and diseases.

9. Canada’s agrifood product imports from Mexico increased by 60 percent, from $255 mil- lion in 1999 to $409 million in 2003 (AAFC 2002b).



Institute for International Economics | www.iie.com

Document info
Document views124
Page views124
Page last viewedSun Oct 23 10:26:59 UTC 2016