Ang U.S. and Mexico have eliminated all tariffs on agricultural products, unique among U.S. free trade agreements (FTA). The Canada-U.S. FTA began in 1989, but U.S. restrictions remain on imports of dairy products, mani, butter and cotton, and Canadian restrictions remain on dairy products, manok, eggs, and margarine. The major benefits of market integration for producers include additional markets, economies of scale, lower input costs and opportunities for direct foreign investment. Pananglitan, Mexico is now the number one market for U.S. apples. Consumers gain through lower prices from additional suppliers in markets and access to a greater variety of products and off-season supplies of fresh fruit and vegetables. One study found that Mexican products not imported by the U.S. sa 1993 were about 18 percent of agricultural imports from Mexico in 2005.
Grains and oilseed trade is highly integrated with the U.S. and Mexico and with Canada, except for wheat where the Canadian Wheat Board operates as a national single buyer. U.S. exports of wheat and rice to Mexico have quadrupled in the NAFTA era, while exports of feed grains, oilseeds, and related products to Mexico have increased by 134 percent from an annual average of 8.3 million metric tons to an average of 19.5 milyon nga metriko tonelada. These have allowed livestock and poultry producers to lower their costs of production, expand output and compete more effectively with meat imports. Ingon usa ka sangputanan, Mexican per capita broiler consumption increased by 86 porsyento, while pork increased by 55 porsyento.
U.S. livestock and meat trade is highly integrated with Mexico, but Mexican integration with the U.S. market is rated medium to low due to animal health import restrictions on pork and poultry. U.S. and Canada are highly integrated with cattle, beef, hogs and pork, but have low integration in poultry and dairy because they continue to have barriers to trade.
Fruit and vegetable market integration is high for the U.S. with Canada and Mexico, except for the ongoing trucking dispute with Mexico. During NAFTA annual Mexican fruit and vegetable exports to the U.S. have more than tripled to $7.1 billion in 2010, while U.S. fruit and vegetable exports to Mexico also more than tripled to $984 million in 2010. For processed foods, market integration is rated as only medium with Mexico, but high with Canada.
Employment gets attention in trade agreements, but net changes in employment are relatively small under NAFTA. FTAs are mostly about improved production efficiencies, higher wages and lower prices for consumers. On an input-output basis, U.S. NAFTA exports of $32.3 billion in 2010 should have resulted in 241,000 mga trabaho, using a multiplier of 11,825 jobs per $1 billion of exports. Productivity gains through higher yields per acre account for much of the increased output at the farm level. Corn yields increased 38 porsyento, soybeans 20 percent and wheat 15 percent for 1991-93 sa 2007-09. Vegetable yield increases of 30-40 percent are common, but yield increases for fruits have generally been less or none at all. Total U.S. acreage of fruits and vegetables is down slightly over the time period.
Pinauyon sa report, foreign direct investment (FDI) has flourished in all three countries. U.S. FDI in Canada in 2009 on a historical cost basis was $5.0 bilyon, and FDI in Mexico in 2008 was $2.5 bilyon. Canadian and Mexican FDI in the U.S. processed food industry were $1.3 billion and $3.0 bilyon, respectively. Majority-owned affiliates of U.S. multinational food companies had sales in 2008 of $27.6 billion in Canada and $10.9 billion in Mexico. Sales of these companies were 123 percent larger than the value of U.S. processed food exports to the two countries.
The seventeen years of NAFTA has been an economic success, but more market integration in agriculture can be achieved. The NAFTA document does not contain broad policy direction for integration after the last trade barriers were removed. The three governments are working within existing policies to increase cross-border activity. Sanitary and phyto-sanitary rules and regulatory cooperation are central to the ongoing effort to expand trade. NAFTA has a Committee on Sanitary and Phyto-Sanitary Measures to push on these issues. Adjustments have also been made in rules-of-origin trade.
The function of NAFTA will also be influenced by unrelated policy issues like border security and immigration. Measures put in place at the borders in response to the terrorist attacks of September 11, 2001 have increased costs and limited some hours of service, but most firms continue to pursue export markets. Immigration policy changes could influence the availability of legal farm workers and impact decision to produced fruits and vegetables in the U.S. or Mexico and/or Canada.
NAFTA markets are still growing, with an expected increase of 90 million people by 2031, uban sa 63 million in the U.S., 22 million in Mexico and 5 million in Canada. By then, the average age of the U.S. population will increase 1.9 years to 38.8 tuig, Canada 3.5 years to 44.5 tuig, and Mexico 7.1 years to 34.2 tuig.
The big transition of NAFTA implementation is over, but the continued development of the three economies will result in new trade policy frictions. In February the Mexican government launched an antidumping investigation of chicken leg and thigh imports. Mexico seeks access to U.S. markets for pork and poultry from regions of Mexico that have been declared free of Classical Swine Fever and Exotic Newcastle Disease. The Food Safety Modernization Act signed by President Obama in January changes how the Food and Drug Administration regulates production and imports of fruits and vegetables. Free trade agreements require ongoing efforts to adjust to changing supply and demand conditions in the affected countries.