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Iowa Ag Review

Abstract

The North American Free Trade Agreement (NAFTA) is a success story of economic integration between Mexico, the United States, and Canada. Economic integration was on its way before the Agreement, but it received a significant boost when NAFTA went into effect in 1994. Relative to the rest of the world, merchandise trade among the three countries has intensified and is growing at a rate of about 10 to 12 percent a year. With respect to agriculture, Mexico exports fruits and vegetables, coffee, live cattle, and textiles, among other things, to the United States. The United States exports grains and feed (90 percent of Mexican imports), soybeans and soybean products, meat, cotton, yarn, and textiles to Mexico. Tariffs have disappeared or have been decreasing between Mexico and the United States (there is no tariff, for example, on Mexican imports of U.S. and Canadian non-breeding cattle and beef).