Contents

Approved by USDA’s 

World Agricultural 

Outlook Board

United States

Department

of Agriculture

www.ers.usda.gov

A Report from the Economic Research Service

Abstract

This report examines the integration of North America’s agricultural and food markets 

as a result of the North American Free Trade Agreement (NAFTA), implemented in 

1994. NAFTA has had a profound effect on many aspects of North American agriculture over the past two decades. With a few exceptions, intraregional agricultural trade 

is now completely free of tariff and quota restrictions, and the agricultural sectors of 

the member countries—Canada, Mexico, and the United States—have become far 

more integrated, as is evidenced by rising trade in a wider range of agricultural products, substantial levels of cross-border investment, and important changes in consumption and production. The report also examines recent disputes among its constituents 

and identifies opportunities for further reforms of mutual benefit to the member countries, with particular attention devoted to the NAFTA governments’ efforts to seek 

deeper regional integration through such means as regulatory cooperation and modifying the agreement’s rules of origin and broader access to markets in other parts of the 

world through the negotiation of additional free-trade agreements.

Keywords: North American Free Trade Agreement, NAFTA, Canada-U.S. Free Trade 

Agreement, CUSTA, Canada, Mexico, United States, trade, investment, sanitary, 

phytosanitary.

WRS-15-01

February 2015

Steven Zahniser, zahniser@ers.usda.gov

Sahar Angadjivand, sangadjivand@ers.usda.gov

Tom Hertz, thertz@ers.usda.gov

Lindsay Kuberka, lmkuberka@ers.usda.gov

Alexandra Santos*

NAFTA at 20: North America’s 

Free-Trade Area and Its Impact 

on Agriculture

Introduction . . . . . . . . . . . . . . 1

What Is NAFTA? . . . . . . . . . 2

Overview of North American 

Market Integration . . . . . . . . 4

A North American Market 

for Grains, Oilseeds, and 

Related Products . . . . . . . . . 22

Livestock and Animal Product 

Markets Experience Further 

Integration . . . . . . . . . . . . . . 28

A Highly Integrated Fruit 

and Vegetable Market . . . . 36

Unusually Abundant Crops 

Alter Conditions in the 

U.S.-Mexico Sugar and 

Sweetener Markets . . . . . . . 46

Multilateral Trade 

Liberalization Reshapes 

the Cotton, Textile, and 

Apparel Markets . . . . . . . . . 49

A North American Approach 

to Deeper Integration . . . . . 51

Extending Free Trade to 

New Markets . . . . . . . . . . . . 55

Conclusion . . . . . . . . . . . . . . 59

References . . . . . . . . . . . . . . 60

Appendix Tables . . . . . . . . . 74

*Alexandra Santos provided research assistance for this report as part of her participation in the 

USDA iServe Internship Program.
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Acknowledgments

We are thankful for comments and suggestions received from a number of individuals, including 

Linda Calvin, Erik Dohlman, Maurice Landes, and Andrew Muhammad (USDA, Economic 

Research Service (ERS)); Leanne Skelton (USDA, Agricultural Marketing Service (AMS)); Steve 

Haley (USDA, World Agricultural Outlook Board); and Esther Bleicher (U.S. Food and Drug 

Administration). Kenneth Mathews (ERS); Dan Berman, Amanda Hinkle, Elle O’Flaherty, John 

Passino, and Kathryn Ting (USDA, Foreign Agricultural Service); Ana Isabel Acosta Martínez 

(Universidad Autónoma de Baja California); James Rude (University of Alberta); Marc McFetridge 

(AMS); and Lynn Alfalla (USDA, Animal and Plant Health Inspection Service) provided valuable 

peer reviews. Preparation of this report was supported in part by a grant from the Emerging Market 

Program of USDA’s Foreign Agricultural Service. Special thanks go to John Weber and Cynthia A. 

Ray (ERS) for editing and design of the report.
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Introduction

More than 20 years have passed since January 1, 1994, when the North American Free Trade 

Agreement (NAFTA) was first implemented. On that date, NAFTA’s member countries—Canada, 

Mexico, and the United States—started a 14-year process in which they gradually removed thousands of barriers to intraregional trade, including all agricultural products traded between Mexico 

and the United States and nearly all agricultural products traded between Canada and the United 

States and between Canada and Mexico. Canada and the United States already had started to 

implement bilateral trade liberalization in 1989 as part of the Canada-U.S. Free Trade Agreement 

(CUSTA), which was then subsumed by NAFTA, so the year 2014 may be thought of as both the 

20th anniversary of NAFTA and the 25th anniversary of CUSTA.1

NAFTA has had a substantial impact on the integration of North America’s agricultural markets. 

Market integration is the extent to which one or more formerly separated markets have combined 

to form a single market. Integration is visible in increased cross-border flows of goods, services, 

capital, and labor. Trade in goods consists of not only final consumer products but also intermediate inputs and raw materials, as firms reorganize their activities around regional markets for both 

inputs and outputs, spurred in part by greater foreign direct investment (FDI).2 In addition, decisionmakers in both the government and the private sector continue to pursue a course of greater institutional and policy cooperation and coordination to encourage further market integration.

Integration of North America’s agricultural markets, as fostered by NAFTA, offers many tangible 

benefits. In general, it enables agricultural producers and consumers in the region to benefit more 

fully from their relative strengths and to respond more efficiently to changing economic conditions. For producers, it opens new territories for the sale of their output, possibly allowing for the 

further exploitation of economies of scale; however, it also opens the door to new competition 

from producers in locations that were formerly isolated by tariff and quota barriers. In addition, the 

creation of a larger, single market gives producers access to potentially cheaper suppliers of inputs 

and creates new opportunities for FDI, as firms restructure their vertical and horizontal arrangements.3 For consumers, the formation of a unified market provides access to new varieties of food 

products and off-season supplies of fresh produce. Greater competition along the food supply chain 

is likely to make food more affordable, thereby expanding consumer purchasing power.

This report examines the extent to which a single market has taken hold in North American agriculture, provides detail on intraregional trade in specific commodity groups, and describes ongoing 

efforts to advance the sector’s market integration and to establish new free-trade agreements (FTAs) 

with countries outside NAFTA. The assessment of market integration relies on a framework first 

presented in ERS’s 2005 NAFTA report (Zahniser, 2005).4

1We tend to use the word “NAFTA” to refer to the entire agreement, including provisions incorporated from CUSTA.

2The U.S. Department of Commerce, Bureau of Economic Analysis (2014b) defines FDI as the “ownership or control, 

directly or indirectly, by one foreign resident, the foreign parent, of at least 10 percent of a [domestic] business enterprise.”

3The OECD (2014) defines vertical integration as “the ownership or control by a firm of different stages of the 

production process,” while a horizontally integrated enterprise is “one in which several different kinds of activities that 

produce different kinds of goods or services for sale on the market are carried out in parallel with each other.”

4Previous editions of ERS’s NAFTA report are available in the NAFTA, Canada, and Mexico pages of the ERS website 

(http://www.ers.usda.gov/topics/international-markets-trade/countries-regions/nafta,-canada-mexico.aspx). Unlike the 

previous editions, this report is not prepared in response to a congressional mandate; the mandate behind the reports issued 

from 1995 to 2011 ended with the 2011 edition.
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What Is NAFTA?

NAFTA is a comprehensive economic and trade agreement that establishes a free-trade area encompassing Canada, Mexico, and the United States. NAFTA is structured as three separate bilateral 

agreements, one between Canada and the United States, a second between Mexico and the United 

States, and a third between Canada and Mexico. The first accord is CUSTA, which took effect on 

January 1, 1989, and was subsumed by NAFTA. The second and third agreements are found in 

NAFTA itself, which took effect on January 1, 1994.

Tariff elimination for the items addressed by CUSTA concluded on January 1, 1998. CUSTA 

exempted certain agricultural products from U.S.-Canada trade liberalization: U.S. imports of dairy 

products, peanuts, peanut butter, cotton, sugar, and sugar-containing products and Canadian imports 

of dairy products, poultry, eggs, and margarine. Quotas that once governed bilateral trade in these 

commodities were redefined as tariff-rate quotas (TRQs)5 to comply with the Uruguay Round 

Agreement on Agriculture (URAA), which took effect on January 1, 1995. NAFTA also exempted 

dairy and poultry products from Canada-Mexico trade liberalization. Canada has been extremely 

reluctant to consider full trade liberalization of its dairy, poultry, and egg product sectors, which are 

governed by supply management and protected by high over-quota tariffs—a long-standing position 

by Canada in international trade negotiations.6

Tariff elimination for the agricultural products addressed by NAFTA concluded on January 1, 2008. 

NAFTA did not exclude any agricultural products from U.S.-Mexico trade liberalization. Numerous 

restrictions on bilateral agricultural trade were eliminated immediately upon NAFTA’s implementation, while others were phased out over periods of 4, 9, or 14 years. Trade restrictions on the last 

handful of agricultural commodities (such as U.S. exports to Mexico of corn, dry edible beans, and 

nonfat dry milk and Mexican exports to the United States of sugar, cucumbers, orange juice, and 

sprouting broccoli) were removed in 2008. Similar but not identical restrictions on Canada-Mexico 

trade also were removed at that time.7

NAFTA covers much more than tariffs and quotas. The agreement recognizes the right of each 

member country “to adopt, maintain or apply any sanitary or phytosanitary measure necessary for 

the protection of human, animal or plant life or health in its territory,” and like the URAA, NAFTA 

requires that sanitary and phytosanitary (SPS) measures be scientifically based, nondiscriminatory, 

and transparent, and that these measures restrict trade in a minimal fashion. NAFTA also established the NAFTA Committee on Sanitary and Phytosanitary Measures to facilitate technical coop5A TRQ is a quota for a volume of imports at a generally low tariff. After the quantitative limit is reached, a higher 

tariff is applied on additional imports.

6Recently, the Canadian Government has shown some flexibility in this regard. As part of the agreement-in-principle 

for the Comprehensive Economic and Trade Agreement (CETA) between Canada and the European Union (EU), unveiled 

in October 2013, the EU secured additional duty-free access to the Canadian cheese market in the amount of 16,000 

metric tons of specialty cheeses and 1,700 metric tons of industrial cheese per year, along with an additional 800 metric 

tons of Canada’s World Trade Organization TRQ for cheese that is being reallocated to the EU in response to the EU’s 

expansion (Government of Canada, 2013). The sum of these quantities (18,500 metric tons) corresponds to about 4 percent 

of Canada’s domestic cheese consumption in 2013 [calculated using consumption data from Canada Dairy Information 

Centre (2013) and population data from U.S. Department of Commerce, Bureau of the Census (2013)].

7While NAFTA’s transition to intraregional free trade in agricultural products ended in 2008, at least one 

nonagricultural product has a transitional period longer than 14 years. In 2009, Mexico started to allow the importation of 

used cars from the United States, and this trade will not be free of tariff restrictions until 2018.
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eration between the NAFTA countries in developing, applying, and enforcing SPS measures. To 

fulfill these responsibilities, the NAFTA governments have worked to fine tune their SPS measures 

in ways that facilitate trade and to cooperate on regulatory issues involving trade. Such regulatory 

cooperation often occurs on a bilateral basis, although the NAFTA Committee on Sanitary and 

Phytosanitary Measures still meets in response to a direct request from any NAFTA government.

Another important element within NAFTA is the establishment of key principles regarding the 

treatment of foreign investors. These principles include a firm commitment from each NAFTA 

country to treat foreign investors from the other member countries no less favorably than it treats 

its own domestic investors. In addition, the accord prohibits the application of certain performance requirements on foreign investors, such as a minimum amount of domestic content in 

production. These provisions reinforce similar changes that Mexico made to its foreign investment laws prior to NAFTA.

NAFTA also created formal mechanisms for the resolution of disputes concerning the agreement’s provisions for investment (Chapter 11) and services (Chapter 14), the final antidumping 

and countervailing duty determinations of the member countries (Chapter 19), and the general 

interpretation and application of the agreement (Chapter 20). These mechanisms have provided 

the framework for addressing disputes on a variety of topics, including U.S. countervailing duties 

(CVDs) on live swine from Canada, Mexican antidumping duties (ADs) on selected U.S. apples, 

Mexico’s former sales tax on beverages made from sweeteners other than cane sugar, NAFTA’s 

provisions for cross-border trucking between Mexico and the United States, and Canada’s application of TRQs allowed under the URAA to U.S. products imported under NAFTA. As of October 

2014, the NAFTA Secretariat (2014) listed just one active dispute settlement case under Chapters 

19 or 20 of NAFTA that directly concerns agricultural products—an AD case involving Mexican 

imports of U.S. chicken thighs and legs—and the duties in this case have been suspended by the 

Mexican Government so that Mexico’s poultry market can stabilize following outbreaks of Highly 

Pathogenic Avian Influenza (HPAI) in several poultry-producing areas in that country.

Antidumping duties are currently in effect for just a handful of agricultural products traded among 

the NAFTA countries: Canadian imports of refined sugar in granulated, liquid, and powdered form 

and whole potatoes from the United States; U.S. imports of citric acid and certain citrate salts 

from Canada; and Mexican imports of epoxidized soybean oil from the United States (Canada 

Border Services Agency, 2014; México, Secretaría de Economía, Unidad de Prácticas Comerciales 

Internacionales, 2014; U.S. International Trade Commission, 2014a). No CVDs are currently in 

effect with respect to intraregional agricultural trade. Over the past several years, however, two 

major developments occurred in the AD/CVD arena: in March 2013, a new agreement suspending 

a U.S. antidumping investigation of tomato imports from Mexico took effect, and in October 2014, 

draft agreements were completed to suspend U.S. AD and CVD investigations regarding sugar 

imports from Mexico. These developments are discussed later in the report.
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Overview of North American Market Integration

Table 1 presents an overview of changes in the level of market integration in North American 

agriculture since the implementation of NAFTA, using the framework established in ERS’s 2005 

NAFTA report (Zahniser, 2005). This framework focuses on two main characteristics of each 

agricultural subsector: (1) cross-border economic activity—primarily agricultural trade and intraregional FDI; and (2) the tariffs, quotas, and other barriers in place that limit cross-border trade 

and investment.8 Most sectors within North American agriculture now feature a high degree of 

integration, defined by substantial flows of cross-border trade and investment and the removal of 

most major barriers to trade and investment, in large part due to NAFTA. Because the agreement’s 

process of trade liberalization was so sweeping, very few agricultural sectors are currently marked 

by a medium degree of integration, defined by the presence of one or more significant barriers to 

trade and/or investment. Recent examples of sectors characterized by a medium degree of integration include the U.S. and Canadian wheat markets prior to the end of the single-desk trading 

authority of the Canadian Wheat Board (CWB) and the markets adversely affected by the retaliatory 

tariffs applied by Mexico from March 2009 to October 2011 in conjunction with the U.S.-Mexico 

trucking dispute, which is now resolved. The degree of market integration is low in sectors that were 

excluded from NAFTA’s project of agricultural trade liberalization, such as the U.S. and Canadian 

dairy, poultry, and egg product sectors. Prior to NAFTA, a number of agricultural sectors, such as 

the U.S. and Mexican grain and oilseed sectors, had a low degree of market integration due to the 

presence of substantial tariffs, quotas, and other trade restrictions.

Intraregional Agricultural Trade More Than Triples

Agricultural trade among NAFTA’s member countries has grown tremendously during the NAFTA 

period (fig. 1).9 The total value of intraregional agricultural trade (exports and imports) among all 

three NAFTA countries reached about $82.0 billion in 2013, compared with $16.7 billion in 1993 

(the year before NAFTA’s implementation) and $8.8 billion in 1988 (the year before CUSTA’s 

implementation).10 When the effects of inflation are taken into account, this expansion in intraregional agricultural trade corresponds to an increase of 233 percent between 1993 and 2013. Over the 

same period, increases of this proportion or larger are also present in the volumes of many agricultural commodities traded among the NAFTA countries (app. tables 1-4).

8Other analytical approaches could be developed and implemented with further effort. For instance, one could use 

trade-to-output ratios to measure levels of economic openness or econometric methods to study the integration of commodity prices in the NAFTA countries.

9The trade data in this report are drawn mainly from three sources. The Global Agricultural Trade System (GATS)—

produced by the U.S. Department of Agriculture, Foreign Agricultural Service (2014a) using data from the U.S. Census 

Bureau—is the primary source of the U.S. agricultural trade data, including data on bilateral trade between the United 

States and its NAFTA partners. The GATS data are routinely updated, so the values in this report may not precisely match 

the most recent values in GATS. When the GATS data are not sufficient, trade statistics published by the Canadian and 

Mexican Governments are used. Statistics Canada, CATSNET Analytics (2014) is the source of the Canadian statistics, 

while Mexico’s Secretaría de Economía—as cited by Global Trade Information Services (2014)—is the source of the 

Mexican statistics. Unless otherwise indicated, trade values are in nominal terms. 

10When one subtracts Canada-Mexico agricultural trade from intraregional agricultural trade, one gets the value of 

U.S. agricultural trade with Canada and Mexico. In 2013, U.S. agricultural trade with its NAFTA partners equaled $78.9 

billion, compared with $16.3 billion in 1993 and $8.5 billion in 1989.
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Trade Liberalization Also Spurs Agricultural Trade Between the NAFTA Countries 

and the Rest of the World

Overall, intraregional agricultural trade among the NAFTA countries grew at a faster pace during the past two 

decades than agricultural trade between the NAFTA countries and the rest of the world. Between 1991-93 and 

2010-12, intraregional agricultural trade (as reflected in export data) expanded at a compound annual rate of 7.9 

percent, while agricultural trade with the rest of the world (exports and imports combined) increased at a rate 

of 6.9 percent. An analysis of agricultural trade shares conducted by Zahniser and Herrera Moreno (2014) and 

reproduced in the table underscores the importance of additional trade agreements negotiated by the NAFTA 

countries with countries in other parts of the world subsequent to NAFTA to the growth of North American 

agricultural trade with the rest of the world.1 For instance, Mexico’s free-trade agreements (FTAs) in addition to 

NAFTA have broadened the customer base for Mexican agricultural products to encompass both middle-income 

economies in Central and South America and the upper income economies of Europe and Japan. As a result, 

Mexico’s FTA partners outside NAFTA purchased 13.6 percent of Mexico’s total agricultural exports during 

2010-12, compared with 7.0 percent during 1991-93. Similarly, China and Hong Kong’s combined share of total 

U.S. agricultural exports climbed from 3.3 to 18.3 percent between 1991-93 and 2010-12, and their share of total 

Canadian agricultural exports increased from 7.2 to 10.2 percent, due to China’s accession to the WTO and the 

general opening of China to the global economy.

1Table 8 provides a full list of the NAFTA countries’ FTAs other than NAFTA.

Agricultural trade of the NAFTA countries by trade partner: Annual averages and shares, 1991-93 versus 2010-12

NAFTA 

NAFTA partners

Other FTA 

partners

China and 

Hong Kong Rest of world Total

1991-93 2010-12 1991-93 2010-12 1991-93 2010-12 1991-93 2010-12 1991-93 2010-12

Values in billions of U.S. dollars (shares in percent in parentheses)

Exports by:

U.S. 8.4 36.1 4.6 16.4 1.4 23.9 27.4 54.6 41.9 131.2

 (20.1) (27.6) (11.0) (12.5) (3.3) (18.3) (65.5) (41.7) (100) (100)

Mexico 3.3 17.0 0.3 2.9 0.0 0.3 0.1 0.9 3.7 21.0

 (88.9) (81.0) (7.0) (13.6) (0.2) (1.3) (3.9) (4.1) (100) (100)

Canada 6.2 23.4 0.2 0.9 0.8 4.5 4.5 14.8 11.7 43.6

 (52.6) (53.7) (1.8) (2.1) (7.2) (10.2) (38.4) (34.0) (100) (100)

Imports by:

U.S. 6.6 33.7 4.4 14.1 0.5 4.0 12.7 42.7 24.3 94.6

 (27.1) (35.7) (18.3) (15.0) (2.1) (4.3) (52.5) (45.1) (100) (100)

Mexico 4.0 20.4 0.8 2.8 0.0 0.4 0.6 1.8 5.4 25.5

 (72.8) (80.0) (15.0) (11.2) (0.4) (1.6) (11.8) (7.2) (100) (100)

Canada 5.0 20.6 0.4 1.8 0.2 1.1 2.7 9.7 8.3 33.2

 (60.6) (62.1) (4.6) (5.5) (2.0) (3.3) (32.8) (29.2) (100) (100)

Note: Canada’s trade statistics cover both agri-food and seafood products. “Other FTA partners” are defined as a given country’s FTA 

partners outside of NAFTA, as of September 2014. Thus, the sets of countries listed in the table as “FTA countries” and “Rest of world” in 

the columns for 1991-93 are the same as for 2010-12. Percentages within rows may not sum to 100 percent due to rounding.

Source: Reproduction of table 2 in Zahniser and Herrera Moreno (2014). Canadian and U.S. data were obtained from Statistics Canada, 

as cited by Agriculture and Agri-Food Canada (2013), and USDA/FAS (2014a), respectively. Mexican data were obtained directly from 

México, Secretaría de Economía. Nominal annual exchange rates from U.S. Department of Agriculture, Economic Research Service 

(2014b) were used to convert Canadian trade statistics to U.S. dollars.
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Table 1

NAFTA has advanced the integration of many aspects of North American agriculture

General comments U.S.-Mexico U.S.-Canada

Grains and 

oilseeds

Sizable increases in U.S. 

exports to Mexico and Canadian 

exports to the United States and 

Mexico. Important cross-border 

investments in grain milling. 

Expanded biofuel production 

increases demand for certain 

grains and oilseeds.

Pre-1994: Low degree of integration.

Mexico tightly regulated importation 

of corn, wheat, and barley via import 

permits. Sorghum, with duty-free access 

to the Mexican market, rivaled corn as the 

leading feed grain imported by Mexico.

Now: High degree of integration. Corn 

emerges as leading feed commodity 

imported by Mexico. Strong linkages 

between U.S. grain and oilseed farmers 

and Mexican livestock producers. Mexican 

direct investment is present in the U.S. 

baking and tortilla industries.

Pre-1989: Medium degree of integration.

Tariffs and other trade-related policies 

discourage North-South trade in wheat 

and wheat products. Moderate tariffs 

impeded bilateral trade in vegetable oils.

Now: High degree of integration.

Growing two-way trade encompasses 

bulk commodities, feed ingredients, 

and processed foods. Separate from 

NAFTA, Canada ends single-desk trading 

authority of Canadian Wheat Board 

(CWB).

Livestock 

and animal 

products

U.S. and Canadian beef 

exporters regain access to 

many Asian markets following 

coordinated response by 

NAFTA governments to 

detections of bovine spongiform 

encephalopathy (BSE) in 

Canada and United States. 

Canada and Mexico challenge 

U.S. requirements for mandatory 

country-of-origin labeling 

(COOL) at WTO.

With the removal of tariffs 

and quotas (except for supply 

managed commodities in 

Canada), progress in addressing 

the sanitary concerns of 

importing countries becomes 

crucial to further market 

integration.

Pre-1994: Medium degree of integration, 

except Mexican exports of pork and 

poultry meat (low). Mexico already 

supplied substantial number of feeder 

cattle to United States and had a mostfavored-nation (MFN) tariff of zero on beef 

imports until 1992.

Now: High degree of integration, except 

Mexican exports of pork and poultry 

meat (low). U.S. meat exports to Mexico 

double in volume during NAFTA period. 

Largest chicken producer in Mexico 

owns hatchery in United States; second 

largest is an affiliate of a Brazilian firm 

with operations that formerly belonged to 

U.S. firms. Mexican beef exports to U.S. 

and Asian markets increase. U.S. imports 

of Mexican pork and poultry meat remain 

low due to sanitary concerns.

Pre-1989: Medium degree of integration 

in cattle, beef, hogs, and pork. U.S. and 

Canadian beef quotas discouraged 

integration of cattle and beef sectors. 

Two-way trade in beef and U.S. imports of 

Canadian pork already underway.

Low degree of integration in dairy, 

poultry, and egg products due to supply 

management.

Now: High degree of integration in 

cattle, beef, hogs, and pork. Expanded 

Canadian hog exports to U.S. include 

larger proportion of feeder animals that 

are finished in the United States. Sizable 

levels of two-way trade in beef and cattle.

Low degree of integration in dairy, poultry, 

and egg products. Supply management 

continues. Canadian re-export programs 

allow some imports of U.S. product, but 

only if used as inputs in manufacture of 

processed foods for export.

Fruit and

vegetables

Attention to food safety and 

coordination of phytosanitary 

measures are central to 

integration. Trade expansion 

is related to increased 

consumption of fresh produce, 

particularly in Canada and 

the United States, on both 

seasonal and aggregate levels. 

Search for risk-mitigating tools 

for intraregional produce trade 

continues despite creation of 

Fruit and Vegetable Dispute 

Resolution Corporation (DRC). 

In 2014, USDA withdraws 

special status that Canadian 

produce exporters previously 

had enjoyed under Perishable 

Agricultural Commodities Act 

(PACA).

Pre-1994: Medium degree of integration 

for most commodities. Many U.S. tariffs 

were designed on a seasonal basis to 

protect U.S. produce as it entered the 

market. Phytosanitary protocols did not 

yet exist to facilitate U.S. imports of fresh 

avocados from Mexico.

Now: High degree of integration. Large 

volumes of bilateral trade. Mexico 

surpasses Canada to become largest 

foreign market for U.S. apples and pears. 

DRC closes its Mexico office in 2007 due 

to lack of participation by Mexican buyers.

Pre-1989: Medium degree of integration.

Tariffs limited some aspects of bilateral 

trade. U.S. produce exports to Canada 

encompassed multiple commodities, 

while potatoes accounted for bulk of U.S. 

produce imports from Canada.

Now: High degree of integration. 

Canadian consumers have duty-free 

access to full range of U.S. produce. 

Canada is now an important supplier of 

greenhouse tomatoes, cucumbers, and 

peppers to the United States, in addition 

to fresh and frozen potatoes. 

Continued—
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Table 1

NAFTA has advanced the integration of many aspects of North American agriculture—continued

General comments U.S.-Mexico U.S.-Canada

Sugar and 

sweeteners

Growing intraregional trade in 

processed foods containing 

sweeteners. Such trade may 

substitute for sugar trade to 

some extent in case of CanadaU.S. trade. Draft agreements 

are reached to suspend U.S. 

antidumping and countervailing 

duty investigations regarding 

sugar imports from Mexico. 

Investigations were launched 

in 2014 in response to petition 

filed by U.S. industry groups, 

following unusually large crops 

in 2012 and 2013.

Pre-1994: Low degree of integration:

Negligible bilateral trade in sugar and 

high-fructose corn syrup (HFCS). Some 

trade in sweetener-containing products.

Now: High degree of integration.

Large volumes of U.S. sugar imports 

from Mexico and U.S. HFCS exports 

to Mexico. Exchange, analysis, and 

dissemination of market information by 

U.S.-Mexico Governmental Sweetener 

Working Committee. Trade restrictions in 

draft suspension agreements may have 

potential to lessen integration of U.S. and 

Mexican sugar markets.

Pre-1989: Low degree of integration.

Some bilateral trade in sweetenercontaining processed foods, such as 

confectionery products and baked goods.

Now: Low degree of integration.

Exemption of U.S. imports from Canada of 

sugar and sugar-containing products from 

bilateral trade liberalization. Low levels of 

bilateral trade in sugar, but growing trade 

in maple syrup, glucose and glucose 

syrup, and HFCS.

Cotton, 

textiles, 

and 

apparel

World Trade Organization’s 

Agreement on Textiles and 

Clothing leads to much greater 

competition from China, India, 

Pakistan, Bangladesh, Vietnam, 

and other non-NAFTA countries.

Pre-1994: Medium degree of integration.

Bilateral textile and apparel agreement 

of 1988 broadened quotas in several 

categories of product.

Now: High degree of integration.

Specialization in which United States 

supplies cotton to Mexico and Mexico 

supplies cotton textiles and apparel to 

United States continues despite increased 

imports from non-NAFTA countries.

Pre-1989: Medium degree of integration.

Trade barriers sustained Canadian textile 

and apparel output and U.S. cotton 

exports to Canada.

Now: High degree of integration.

U.S.-Canada textile and apparel trade 

continues, but Canada shifts away from 

importation and milling of cotton.

Processed 

foods

Long-standing U.S. direct 

investment in Canadian and 

Mexican processed food sectors. 

Sales of Canadian and Mexican 

affiliates of U.S. processed food 

companies still exceed U.S. 

processed food exports to those 

countries.

Pre-1994: Low degree of integration.

Tariff barriers helped to keep bilateral 

processed food trade at low levels.

Now: High degree of integration.

Substantial U.S. investment in Mexico’s 

food industry, with some Mexican 

investments in the U.S. food industry. Beer 

is Mexico’s leading agricultural export to 

the United States.

Pre-1989: Medium degree of integration.

Tariffs inhibited many aspects of bilateral 

processed food trade. Baked goods, 

confectionery products, pet food, and beer 

were among leading products traded.

Now: High degree of integration.

Substantial U.S. and Canadian direct 

investment in each other’s processed food 

industries. Significant and growing intraindustry trade in intermediate and final 

food products.

Source: USDA, Economic Research Service.
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U.S. agricultural exports to the NAFTA countries continue to grow, both at the aggregate level 

and at the commodity level for many products. When this trade is measured in quantity rather than 

value, however, U.S. exports to Canada and Mexico of certain bulk agricultural commodities have 

slowed over the past decade. Corn exports to Mexico have fluctuated greatly since 2008, without 

exhibiting a clear upward or downward trend, while sorghum and soybean exports to Mexico and 

corn and soybean exports to Canada have been on the decline for more than a decade (fig. 2).11

Factors behind these developments include periods of drought that adversely affected crop and livestock production in multiple regions of the United States over the past 5 years; increased Canadian 

production of corn, rapeseed, and soybeans; competing buyers for agricultural commodities in 

countries outside NAFTA; the use of large quantities of U.S.-grown corn as an ethanol feedstock; 

expanded exports of distillers dried grains with solubles (DDGS), a co-product of corn-based 

ethanol production that is used as an animal feed; and a partial shift by Mexican livestock producers 

from sorghum to corn, especially since the initiation of duty-free U.S. corn exports to Mexico as 

part of NAFTA in 2008.

11Sorghum exports to Canada are not listed in figure 2 because Canada uses limited amounts of sorghum in its feed 

rations and imports only small quantities of that commodity. By contrast, Mexico is the leading importer of U.S. sorghum, 

accounting for 64 percent of total U.S. sorghum exports during 2011-13. U.S. sorghum exports to Mexico averaged 1.5 

million metric tons per year during this period, compared with roughly 3,000 metric tons to Canada.

Figure 1

Intraregional agricultural trade has experienced tremendous growth during the 

CUSTA-NAFTA period

CUSTA= Canada-U.S. Free Trade Agreement. NAFTA = North American Free Trade Agreement.

Source: USDA, Economic Research Service, using U.S. trade data from U.S. Department of Commerce, Bureau of the 

Census, Foreign Trade Statistics, as presented by USDA/FAS (2014a), and Canadian trade data (for Canada-Mexico 

trade) from Statistics Canada, CATSNET Analytics (2014).

Billions of U.S. dollars

0

5

10

15

20

25

1988 90 92 94 96 98 00 02 04 06 08 10 12

U.S. exports to Canada

U.S. exports to Mexico

U.S. imports from Canada

U.S. imports from Mexico

Canadian exports to Mexico

Canadian imports from Mexico

Calendar year
9

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Different methodologies used by researchers to evaluate NAFTA’s trade effects generate different 

estimates. Results of a computable general equilibrium (CGE) model presented in ERS’s 1997 

NAFTA Report (Crawford and Link, 1997), for example, indicate that U.S. agricultural exports to 

Canada and Mexico during 1994-96 were about 7 percent and 3 percent higher, respectively, than 

they would have been had the agreement not been in place, while U.S. agricultural imports from 

Canada and Mexico were about 5 percent and 3 percent higher, respectively. Results from a CGE 

model that considered the potential effects of Mexico’s withdrawal from NAFTA and the resulting 

loss of Mexico’s preferential access to the U.S. and Canadian markets (Zahniser and Burfisher, 

2007) suggest that Mexico’s agricultural exports (to all countries) would fall by 7 percent, compared 

with a 2001 base, while corresponding imports would decline by 18 percent.

A number of researchers have estimated NAFTA’s impact on agricultural trade using gravity 

models, in which the level of trade between two economies is posited to be positively related to their 

size and negatively related to any impediments to bilateral trade. In a study of the effects of FTAs 

on international trade in chicken, beef, and pork during the period 2001-05, Ghazalian et al. (2011) 

conclude that meat trade among the NAFTA countries has benefited both from the removal of tariffs 

and quotas and from progress in the area of nontariff measures (NTMs). In particular, the authors 

estimate that the effects on intraregional meat trade of removing tariffs and quotas—increases of 

49 percent for chicken, 48 percent for beef, and 5 percent for pork—are smaller than the effects of 

nontariff preferences among the NAFTA countries—121 percent for chicken, 216 percent for beef, 

Figure 2

U.S. exports to the NAFTA countries have slowed over the past decade for some bulk 

agricultural commodities

NAFTA = North American Free Trade Agreement.

Source: USDA, Economic Research Service, using data from U.S. Department of Commerce, Bureau of the Census, 

Foreign Trade Statistics, as presented by USDA/FAS (2014a). 

Metric tons (thousands)

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

2001 02 03 04 05 06 07 08 09 10 11 12 13

Calendar year

Corn to Mexico

Soybeans to Mexico

Sorghum to Mexico Corn to Canada

Soybeans to Canada
10

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and 163 percent for pork. In a study of agricultural and food trade during the years 1995, 2000, and 

2004, Lambert and McKoy (2009) associate membership in NAFTA with higher levels of trade in 

agricultural products in 1995 and 2000 and in food products in 2000 and 2004. In a study covering 

the period 1985-2000, Jayasinghe and Sarker (2008) find the presence of a positive “NAFTA bloc 

effect” on the order of 100-300 percent for vegetable trade and over 1,000 percent for red meat, 

meaning that bilateral trade in these products is estimated to be that much larger when occurring 

between two NAFTA countries.

ERS assessments in the 2002 NAFTA report (Zahniser and Link, 2002) emphasize that the agreement’s trade effects vary by commodity and trade partner, with the biggest changes in trade occurring in the commodities that underwent the most significant reductions in tariff and nontariff 

barriers. In that analysis, which focused on trade developments between 1994 and 2000, NAFTA 

was found to have had a large positive impact (15 percent or more) on the following components of 

U.S. agricultural trade, relative to what would have occurred in the absence of NAFTA: exports to 

Canada of wheat products, beef and veal, and cotton; exports to Mexico of rice, cattle and calves, 

nonfat dry milk, cotton, processed potatoes, apples, and pears; imports from Canada of wheat, wheat 

products, and beef and veal; and imports from Mexico of wheat products, peanuts, and sugar.

Retaliatory Tariffs Imposed During NAFTA Trucking Dispute 

Reveal Importance of Duty-Free Access

What would happen if the preferential market access secured by NAFTA were lost? Some U.S. 

exporters and their Mexican customers had this very experience from March 19, 2009, to October 

20, 2011, when the Mexican Government imposed retaliatory tariffs on selected agricultural and 

nonagricultural products from the United States. These tariffs, which generally corresponded to 

Mexico’s most-favored-nation (MFN) tariffs, were imposed in association with a dispute that has 

since been resolved concerning NAFTA’s provisions for cross-border, long-haul trucking between 

Mexico and the United States and in accordance with NAFTA’s dispute-resolution procedures.

The retaliatory tariffs were imposed in March 2009 following the cancellation of a U.S. demonstration project for NAFTA’s trucking provisions. NAFTA’s dispute-resolution procedure allowed the 

Mexican Government to suspend U.S. trade benefits of “equivalent effect” to the trucking provisions until the two countries settled the dispute. In February 2001, the Mexican Government won a 

decision regarding the dispute at a NAFTA arbitration panel, following President Clinton’s decision 

in December 1995 to postpone implementation of the agreement’s trucking provisions (NAFTA 

Arbitral Panel, 2001: p. 83). This panel decision thereby gave Mexico the option to retaliate should 

the issue not be resolved. In October 2011, the United States launched a new demonstration project, 

and duty-free trade once again resumed for the products subject to the retaliatory tariffs.

Table 2 contrasts the average annual level of Mexican agricultural imports from the United States 

targeted by the retaliatory tariffs during the tariff period (roughly March 2009 to October 2011) with 

their average annual level during a comparison period encompassing months just prior to the tariffs’ 

imposition and just after their removal (March 2006 to February 2009 and November 2011 to October 

2013). The table does not include the nonagricultural imports subject to these tariffs. As shown in the 

table, 46 of the 53 targeted agricultural imports declined in value during the tariff period.

By adding the percentage increase in Mexican agricultural imports from the United States not covered 

by the retaliatory tariffs (2.3 percent) to the percentage decline in imports covered by the tariffs (19.1 
11

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Table 2

Retaliatory tariffs associated with the U.S.-Mexico trucking dispute had a pronounced effect on 

Mexican agricultural imports from the United States—continued

Mexican agricultural imports 

from the United States

Annual averages

Value Volume Unit value

Mexico’s 

HS code Product

Comparison 

period

Tariff 

period Change

Comparison 

period

Tariff 

period Change

Comparison 

period

Tariff 

period Change

Millions of 

dollars Percent

Metric 

tons Percent

Dollars 

per 

kilogram Percent

Total 15,314.39 15,263.16 -0.3 -- -- -- -- -- --

Not subject 

to retaliatory 

tariffs 13,415.34 13,727.71 2.3 -- -- -- -- -- --

Subject to retaliatory tariffs 1,899.05 1,535.45 -19.1 -- -- -- -- -- --

02031201 Meat of swine, 

legs, ham, and 

cuts thereof, 

bone-in, fresh or 

chilled2

458.06 559.14 22.1 267,085 288,151 7.9 1.72 1.94 13.1

02032201 Meat of swine, 

legs, ham, and 

cuts thereof, 

bone-in, frozen2

13.91 3.76 -73.0 6,958 1,743 -75.0 2.00 2.16 7.9

04061001 Fresh cheese 

(unripened or 

uncured), including that from 

whey cheese, 

and curd2

47.70 19.37 -59.4 12,971 4,947 -61.9 3.68 3.92 6.5

04063099 Processed 

cheese, not 

grated or powdered2

1.35 1.46 7.7 290 421 45.1 4.67 3.46 -25.8

04069004 & 

04069099

Cheese, not 

elsewhere specified or indicated2

112.02 76.72 -31.5 25,541 17,157 -32.8 4.39 4.47 2.0

06049102 & 

06049003

Christmas trees, 

fresh

15.04 9.28 -38.3 19,033 16,160 -15.1 0.79 0.57 -27.3

07031001 Onions 29.90 12.98 -56.6 64,239 46,015 -28.4 0.47 0.28 -39.4

07051101 Iceberg lettuce 17.28 6.57 -62.0 40,594 23,106 -43.1 0.43 0.28 -33.2

07104001

Sweet corn, 

frozen2 8.57 6.84 -20.2 7,492 7,453

-0.5 1.14 0.92 -19.8

08021201 Almonds, shelled 39.06 23.57 -39.7 6,643 6,585 -0.9 5.88 3.58 -39.1

08025001, 

08025099, 

08025101, 

& 08025201

Pistachios, fresh 

or dried2

6.65 5.28 -20.7 1,000 907 -9.3 6.65 5.82 -12.5

Continued—
12

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Table 2

Retaliatory tariffs associated with the U.S.-Mexico trucking dispute had a pronounced effect on 

Mexican agricultural imports from the United States—continued

Mexican agricultural imports 

from the United States

Annual averages

Value Volume Unit value

Mexico’s 

HS code Product

Comparison 

period

Tariff 

period Change

Comparison 

period

Tariff 

period Change

Comparison 

period

Tariff 

period Change

08041001 Dates, fresh 0.33 0.26 -22.0 231 198 -14.2 1.43 1.30 -9.1

08041099 Dates, other 0.47 0.25 -47.4 115 63 -45.4 4.11 3.96 -3.6

08051001 Oranges, fresh 

or dried2

7.70 4.85 -37.0 25,350 24,147 -4.7 0.30 0.20 -33.9

08054001 Grapefruit or 

pomelos, fresh 

or dried2

1.17 0.46 -61.0 7,435 2,374 -68.1 0.16 0.19 22.1

08061001 Grapes, fresh 73.89 29.80 -59.7 49,898 32,529 -34.8 1.48 0.92 -38.1

08081001 Apples, fresh2 244.61 178.31 -27.1 204,161 173,019 -15.3 1.20 1.03 -14.0

08082001 & 

08083001

Pears, fresh 81.25 52.32 -35.6 77,594 69,498 -10.4 1.05 0.75 -28.1

08091001 Apricots, fresh2 2.74 1.01 -63.0 1,645 964 -41.4 1.67 1.05 -36.9

08092001, 

08092101, 

& 08092901

Cherries, fresh2 3.61 2.68 -25.7 912 546 -40.1 3.96 4.91 24.1

08101001 Strawberries, 

fresh

26.07 14.35 -45.0 18,590 14,580 -21.6 1.40 0.98 -29.8

08133001 Apples, dried2 1.90 1.66 -12.4 288 238 -17.1 6.61 6.99 5.7

08135001 Mixtures of dried 

fruit or nuts

6.17 5.45 -11.6 1,027 939 -8.5 6.01 5.80 -3.4

11041201 Oats, rolled or 

flaked2

5.96 8.47 42.0 7,823 10,536 34.7 0.76 0.80 5.4

16024901 Swine meat, 

prepared2

15.29 12.29 -19.6 4,288 3,725 -13.1 3.56 3.30 -7.5

17041001 Chewing gum, 

including those 

coated in sugar2

3.24 6.74 107.7 661 1,068 61.5 4.91 6.31 28.6

18063101 Chocolate, filled2 25.15 13.55 -46.1 6,627 3,045 -54.1 3.79 4.45 17.3

18063201 Chocolate, not 

filled2

16.29 9.76 -40.1 3,374 2,068 -38.7 4.83 4.72 -2.3

19021999 Pasta, not containing egg, not 

cooked, filled, 

or otherwise 

prepared

5.89 7.68 30.5 2,463 3,038 23.4 2.39 2.53 5.8

20041001 Potatoes, frozen 82.93 42.67 -48.5 79,799 42,894 -46.2 1.04 0.99 -4.3

20054001 Peas, prepared 

or preserved, 

except in vinegar 

or acetic acid, 

not frozen

0.34 0.24 -29.2 263 167 -36.6 1.30 1.45 11.8

Continued—
13

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Table 2

Retaliatory tariffs associated with the U.S.-Mexico trucking dispute had a pronounced effect on 

Mexican agricultural imports from the United States—continued

Mexican agricultural imports 

from the United States

Annual averages

Value Volume Unit value

Mexico’s 

HS code Product

Comparison 

period

Tariff 

period Change

Comparison 

period

Tariff 

period Change

Comparison 

period

Tariff 

period Change

20081101 Peanuts, shelled 7.06 6.83 -3.2 3,046 3,422 12.3 2.32 2.00 -13.8

20081199 Peanuts, with 

shell

4.29 3.49 -18.5 1,443 1,374 -4.8 2.97 2.54 -14.4

20081901 Almonds, 

prepared or 

preserved

4.52 3.95 -12.6 580 680 17.2 7.79 5.81 -25.4

20081999 Mixed nuts, 

prepared or 

preserved

59.93 38.83 -35.2 20,462 10,659 -47.9 2.93 3.64 24.4

20086001 Cherries, 

prepared or 

preserved

6.68 3.73 -44.2 2,515 1,487 -40.9 2.65 2.51 -5.6

20098001, 

20098101, 

& 20098999

Fruit or vegetable juice, other 

than orange, 

grapefruit, other 

citric fruit, lime, 

pineapple, 

tomato, grape, or 

apple1

7.90 7.61 -3.7 2,833 2,009 -29.1 2.79 3.79 35.7

20099001 Mixtures of 

vegetable juice 

only1

0.31 0.30 -0.7 114 106 -6.3 2.69 2.85 6.0

20099099 Mixtures of fruit 

or vegetable 

juice, other than 

mixtures of 

vegetable juice 

only1

9.50 8.75 -8.0 3,378 2,781 -17.7 2.81 3.14 11.8

21031001 Soy sauce 6.11 5.60 -8.4 4,579 4,074 -11.0 1.33 1.37 3.0

21032001 Ketchup2 11.79 11.25 -4.5 10,386 10,117 -2.6 1.13 1.11 -2.0

21039099 Condiments, 

other than soy 

sauce, ketchup 

and other tomato 

sacues, mustard 

meal, and prepared mustard

119.18 102.50 -14.0 56,861 50,534 -11.1 2.10 2.03 -3.2

21041001 Prepared pottages, soups, 

and broths, and 

preparations for 

such foods

184.97 144.86 -21.7 50,851 43,861 -13.7 3.64 3.30 -9.2

Continued—
14

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Table 2

Retaliatory tariffs associated with the U.S.-Mexico trucking dispute had a pronounced effect on 

Mexican agricultural imports from the United States—continued

Mexican agricultural imports 

from the United States

Annual averages

Value Volume Unit value

Mexico’s 

HS code Product

Comparison 

period

Tariff 

period Change

Comparison 

period

Tariff 

period Change

Comparison 

period

Tariff 

period Change

21069006 Concentrates of 

juice from a single fruit or vegetable, enriched 

with vitamins or 

minerals

0.38 0.22 -41.3 223 121 -45.8 1.72 1.86 8.3

21069007 Concentrates of 

juice from more 

than one fruit 

or vegetable, 

enriched with 

vitamins or minerals

1.13 0.59 -47.6 332 274 -17.5 3.41 2.16 -36.5

21069008 Food preparations not elsewhere specified 

or indicated, with 

a content of milk 

solids greater 

than 10 percent 

in weight

17.66 16.33 -7.6 3,648 4,331 18.7 4.84 3.77 -22.1

22011001 Mineral water1 3.09 3.66 18.6 12,665 15,216 20.1 0.24 0.24 -1.3

22041099 Sparkling wine, 

other than champagne1

0.23 0.76 225.8 458 744 62.6 0.51 1.03 100.4

22042102 Red, rose, claret, 

or white wine, 

whose alcoholic strength by 

volume is up to 

14 percent at 20 

degrees Celsius, 

in containers of 

clay, ceramics, 

or glass less 

than or equal to 

2 liters1

6.45 5.13 -20.5 1,682 1,647 -2.1 3.84 3.11 -18.8

22060099 Other fermented 

beverages or 

mixtures of 

fermented and 

non-alcoholic 

beverages, not 

elsewhere specified1

11.74 8.06 -31.4 6,588 5,123 -22.2 1.78 1.57 -11.8

Continued—
15

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percent), one can obtain a rough estimate of the retaliatory tariffs’ impact. Compared with the level 

during the comparison period, the tariffs reduced the total value of the targeted U.S. agricultural 

exports to Mexico during this period by an estimated 21.4 percent, or a total of about $1.1 billion when 

the entire 32-month tariff period is taken into account. Because we compare the change in agricultural 

imports covered by the tariffs with the change in agricultural imports not covered by the tariffs, this 

calculation provides a simple control for the trade effects of the global economic downturn that started 

in late 2007, since both groups of imports were influenced by the recession.

Broader Seasonal Availability of Fresh Produce and Greater 

Variety of Food Products

In addition to increasing intraregional agricultural trade, NAFTA has helped to broaden the seasonal 

availability of fresh produce and to increase the variety of food products available to consumers. 

For instance, trade liberalization makes it easier for North American consumers to access fresh 

tomatoes throughout the year, given the existence of protected12 and open-field tomato production 

in each NAFTA country, which as a group have shipping seasons covering the entire calendar year 

(Cook and Calvin, 2005). In an analysis of the changing composition of U.S. agricultural imports 

from Mexico, Jabara and Lynch (2006) find that products not imported by the United States from 

Mexico in 1993 accounted for about 18 percent of U.S. agricultural imports from Mexico in 2005. 

Among the “new varieties” of imports identified by Jabara and Lynch are grape tomatoes and fresh 

avocados—products whose importation has benefited not only from trade liberalization under 

12Protected agriculture is a term that refers to a variety of productive techniques, including greenhouses, row covers, 

drip irrigation, temperature controls, and the use of mulch. 

Table 2

Retaliatory tariffs associated with the U.S.-Mexico trucking dispute had a pronounced effect on 

Mexican agricultural imports from the United States—continued

Mexican agricultural imports 

from the United States

Annual averages

Value Volume Unit value

Mexico’s 

HS code Product

Comparison 

period

Tariff 

period Change

Comparison 

period

Tariff 

period Change

Comparison 

period

Tariff 

period Change

23063001 Sunflower seed 

meal and oilcake

0.54 0.30 -44.2 2,739 1,212 -55.7 0.20 0.25 26.0

23064999 Rape seed meal 

or oilcake with a 

high content of 

erucic acid

0.137 0.001 -99.3 404.01 0.12 -100.0 0.34 8.27 2,334.4

23091001 Dog or cat food, 

for retail sale

80.91 44.94 -44.5 91,769 34,787 -62.1 0.88 1.29 46.5

Note: Comparison period runs from March 2006 to February 2009 and from November 2011 to October 2013. Unless otherwise indicated, the 

tariff period used in the analysis runs from March 2009 to October 2011, corresponding with the actual tariff period from March 19, 2009, to 

October 20, 2011.

1Volume measured in thousands of liters and unit value measured in dollars per liter.

2Tariff period used in the analysis runs from September 2010 to October 2011, corresponding with the actual tariff period for these commodities 

from August 19, 2010, to October 20, 2011.

Source: USDA, Economic Research Service, using Mexico, Secretariat of Economy, as cited by Global Trade Information Services, Inc. (2014).
16

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NAFTA but also from the introduction of a grape tomato variety from Taiwan and more tradeoriented phytosanitary regulations for fresh avocados.

Trade liberalization, trade-oriented phytosanitary standards, and rapid development of the Mexican 

supermarket sector have given Mexican consumers much wider opportunities to purchase noncitrus 

fruit such as apples, pears, and grapes from the United States, to the point where Mexico has 

surpassed Canada to become the leading foreign market for U.S. apples and pears. Similarly, liberalization of U.S.-Canada trade has given Canadians duty-free access to the full range of U.S. produce, 

facilitating U.S. exports of strawberries, cherries, pears, carrots, lettuce, and potatoes, among other 

commodities, although all of these products were familiar to Canadian consumers before CUSTA.

A Small, Positive Net Effect on U.S. Agricultural Employment

By opening the door to new export opportunities and allowing for a more efficient allocation of 

productive resources across economic sectors and geographic areas, NAFTA has increased the 

opportunities for agricultural employment, particularly in those subsectors of agriculture where 

the United States enjoys a clear comparative advantage, such as grains and oilseeds. NAFTA’s net 

impact on U.S. agricultural employment is likely to be small, however, because of the large size 

of the U.S. farm economy relative to U.S. agricultural trade with Canada and Mexico, the high 

capital intensity of U.S. agriculture, technological changes that have allowed production and trade 

to expand without requiring a substantial quantity of additional labor, and the offsetting effects on 

employment levels in different agricultural sectors.

The number of U.S. jobs supported by U.S. agricultural exports to Canada and Mexico has increased 

during the NAFTA period, in large part because these exports grew faster than labor productivity. 

Results from input-output analysis conducted by Persaud (2014) indicate that the total number of 

jobs (agricultural and nonagricultural) throughout the U.S. economy supported by each $1 billion 

in U.S. agricultural exports dropped from about 17,300 in 1994 to 6,577 in 2012. When one multiplies these numbers by the total value of U.S. agricultural exports to Canada and Mexico combined 

($10.1 billion in 1994 and $39.5 billion in 2012), one finds that the number of jobs supported by 

these exports grew from about 175,000 to 260,000, an increase of 48 percent. By comparison, 

142.5 million workers were employed in the U.S. economy in 2012, including 1.9 million in crop 

or animal production and another 1.7 million in food manufacturing (U.S. Department of Labor, 

Bureau of Labor Statistics, 2014).13 Findings from two studies conducted early in the NAFTA 

period (Crawford and Link, 1997; Schluter and Gale, 1996) suggested that the agreement was not 

having a major effect on total U.S. agricultural employment at that time. These findings, whose 

underlying analysis considered the effects of both exports and imports on employment, are broadly 

consistent with an evaluation of NAFTA’s impact on the U.S. economy as a whole by Arnold 

(2003). He found that the agreement increased the size of U.S. gross domestic product (GDP) by 

several hundredths of a percentage point.

With the liberalization of intraregional agricultural trade, the U.S. horticultural sector has seen 

both increased imports from the NAFTA countries and increased exports to those countries. The 

13As with all trade multipliers, care must be taken in the interpretation of the resulting estimate because it does not 

account for price changes or structural changes in the economy since 2002, the year for which the benchmark table was 

constructed. The ERS Agricultural Trade Multipliers (Persaud, 2014) enable users to work with predefined multipliers and 

to create their own multipliers.
17

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production data in table 3 and trade data in appendix tables 1-4 suggest that the experiences of U.S. 

horticultural producers in the face of this competition have varied by commodity. Of the 17 specific 

commodities whose production data for 1991-93 and 2010-12 are listed in table 3, increases in both 

production and area were recorded for six commodities: broccoli, onions, cranberries, sweet cherries, 

grapes, and strawberries. For all of these commodities except cranberries, U.S. exports to Canada averaged more than $75 million per year during 2011-13, and U.S. grape exports to Mexico also averaged 

more than $75 million during this period. Improved yields have made it possible for U.S. production of some import-competing crops, such as bell peppers and watermelons, to increase during the 

NAFTA period, even though area harvested has declined. Still, U.S. producers of some horticultural 

crops, such as asparagus, cucumbers, and tomatoes, have found it challenging to compete with imports 

from the NAFTA countries, and both production and area harvested have declined.14

Processed Food Sector Features Substantial Levels of 

Foreign Investment

One of NAFTA’s main objectives was to “increase substantially investment opportunities in the 

territories of the Parties” (see Article 102 of the agreement)—an objective that encompasses the 

promotion of FDI. As mentioned earlier, NAFTA instituted a number of key principles concerning 

the treatment of foreign investors in an effort to draw more FDI to the region. For Mexico, these 

commitments reinforced similar changes made to its national laws and regulations as part of a longterm effort started in the 1980s to make the Mexican economy more attractive to foreign investors. 

With these investment rules firmly in place, Mexico’s agricultural, food, beverage, and tobacco 

sectors attracted net inflows of additional FDI (from all countries) totaling $48.1 billion from 1999 

to 2013, according to Mexican statistics (fig. 3). Forty-nine percent ($23.6 billion) of these investments were destined for the food industry, while only 2 percent ($976 million) were destined for 

production agriculture (crop and livestock production and agricultural services). The relatively small 

amount of FDI in production agriculture suggests that other methods, such as contracting, are used 

to structure cross-border business relationships between Mexican growers and U.S. buyers.

Changes in how the processed food sector is defined within U.S. FDI statistics, along with restrictions 

on disclosing data that could be used to identify individual firms, make it difficult to evaluate changes 

in FDI in the North American processed food sector since NAFTA’s implementation. U.S. firms 

account for most of the FDI in the North American processed food sector, which is currently defined 

in U.S. statistics not to include the beverage industry or production agriculture. In 2013, the U.S. direct 

investment position (i.e., the total value of assets, on a historical-cost basis) in the processed food 

industries of Canada and Mexico equaled $10.1 billion and $4.0 billion, respectively.15 In contrast, 

the Canadian and Mexican direct investment positions in the U.S. processed food industry were $1.8 

billion and $2.1 billion, respectively. Food sales associated with U.S. direct investment in Canada and 

Mexico are substantial. In 2012, majority-owned affiliates of U.S. multinational food companies had 

14One must be cautious when comparing production data across long time periods, as unusual weather patterns may 

make the selected time periods in the comparison to be unrepresentative. For instance, lower yields for tart cherries and 

grapes during 2010-12 were linked to adverse weather conditions in one or more of those years. In addition, the emergence in the United States of the citrus disease called citrus greening, also known as Huanglongbing (HLB), has adversely 

affected U.S. orange production. USDA’s 2014 Agricultural Outlook Forum devoted an entire session to this subject. For 

more information on the presentations by this panel, see Hebbar (2014), Polek (2014), and Stover (2014).

15Appendix table 5 provides a more detailed breakdown of U.S., Canadian, and Mexican direct investment in the North 

American processed food sector.
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Table 3

U.S. production of vegetables, melons, and fruit has undergone many changes during the NAFTA era

Crop

Area 

harvested Production Yield

1991-93 2010-12 Change 1991-93 2010-12 Change 1991-93 2010-12 Change

Hectares (thousands) Percent Metric tons (thousands) Percent

Metric tons per 

hectare Percent

Vegetables and melons, 

24 crops

735.7 682.4 -7.3 15,212 19,834 30.4 206.8 290.7 40.6

Asparagus (1) 35.3 10.9 -69.2 103 36 -64.7 29.2 33.4 14.4

Bell peppers (1) 26.0 21.7 -16.6 635 797 25.5 243.8 366.8 50.5

Broccoli (1) 43.1 51.2 18.8 521 876 68.2 120.8 170.9 41.5

Cauliflower (1) 22.8 15.0 -34.3 313 309 -1.4 137.4 206.3 50.2

Chile peppers (1) n.a. 8.8 n.a. n.a. 200 n.a. n.a. 226.6 n.a.

Cucumbers 22.9 17.7 -22.7 448 390 -13.0 195.8 220.4 12.6

Onions (1) 57.6 60.0 4.3 2,752 3,326 20.8 478.2 553.8 15.8

Tomatoes 53.3 39.4 -26.1 1,623 1,267 -21.9 304.4 321.7 5.7

Watermelons 83.4 51.7 -38.0 1,657 1,784 7.7 198.7 345.1 73.7

Crop Bearing area

Utilized 

production Yield

1991-93 2010-12 Change 1991-93 2010-12 Change 1991-93 2010-12 Change

Hectares (thousands) Percent

Metric tons (thousands, 

fresh equivalent) Percent

Metric tons per hectare (fresh equivalent) Percent

Noncitrus fruit 808.8 812.0 0.4 14,944 16,170 8.2 18.5 19.9 7.8

Apples 183.5 134.9 -26.4 4,648 4,162 -10.5 25.3 30.8 21.7

Cranberries 11.7 15.8 35.0 187 341 82.9 15.9 21.6 35.5

Cherries, sweet 18.4 34.8 88.8 149 319 114.4 8.1 9.2 13.6

Cherries, tart 19.6 14.6 -25.6 115 75 -34.3 5.9 5.2 -11.8

Grapes 302.4 387.7 28.2 5,323 6,727 26.4 17.6 17.4 -1.4

Papayas (2), (3) 0.9 0.5 -43.2 29 13 -53.7 30.5 24.9 -18.6

Peaches 72.2 46.3 -35.9 1,130 949 -16.0 15.7 20.5 31.1

Pears 28.3 15.5 -45.4 839 797 -5.0 29.6 51.5 73.9

Strawberries (3) 19.9 23.0 15.4 621 1,326 113.5 31.1 57.7 85.1

Other noncitrus fruit 151.8 139.0 -8.5 1,903 1,458 -23.4 12.5 10.5 -16.3

Citrus fruit (4) 359.1 325.5 -9.4 11,765 10,479 -10.9 n.a. n.a. n.a.

Oranges (4), (5) 261.5 251.0 -4.0 8,412 7,934 -5.7 819.6 797.3 -2.7

Other citrus fruit (4) 97.6 74.4 -23.7 3,352 2,545 -24.1 n.a. n.a. n.a.

n.a. = not available. 

NAFTA = North American Free Trade Agreement.

Note: Data are not collected for all States that might produce these crops.

(1) Includes processing total for dual usage crops.

(2) Data listed for 2010-12 are actually for 2010-11 and cover Hawaii only.

(3) Data for area are for area harvested, not bearing area. Yields are based on utilized production.

(4) Data for citrus fruit correspond to crop years 1990-91 to 1992-93 and 2010-11 to 2012-13 and do not include limes.

(5) Yield expressed in boxes per hectare. A box of oranges from Arizona or California weighs 75 pounds, 85 pounds

from Texas, and 90 pounds from Florida.

Source: USDA, Economic Research Service, using USDA/NASS (2013a, 2013b, 2013c, 1994a, 1994b, 1993).
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sales of $32.4 billion in Canada and $13.8 billion in Mexico (fig. 4). Together, these sales were 90 

percent larger than the value of U.S. processed food exports to Canada and Mexico.

Prices Indicate That North American Markets Are Still Not 

Fully Integrated

Another sign of market integration is that a good sells for the same price at any location within that 

market at a given point in time—an economic concept called the “Law of One Price.” With the 

elimination of the tariff and quotas that formerly governed intraregional trade, price differences 

across NAFTA countries are expected to be smaller, and national prices are expected to follow 

similar patterns in response to changing market conditions. Figure 5 provides a simple illustration of 

price integration in the U.S. and Mexican wheat markets. During the 3 years prior to NAFTA (1991-

93), the Mexican price of wheat was over $100 per metric ton higher than the U.S. price. With the 

phasing out of the tariffs that formerly governed U.S.-Mexico wheat trade, this price difference 

gradually narrowed during NAFTA’s first 8 years (1994-2001). Since then, U.S. and Mexican wheat 

prices have tended to move in tandem.

Empirical studies of price integration in the U.S. and Mexican markets suggest that one should not 

overgeneralize the presence of market integration in North American agriculture. In a study of U.S. 

and Mexican horticultural markets during the period January 1998 to September 2008, Avendaño 

Ruiz et al. (2014) find that binational integration is partial and varies from one commodity to 

another. Of the six commodities studied (avocados, cucumbers, onions, peppers, strawberries, and 

Figure 3

Since 1999, the food industry has received about half of the net inflows of FDI in Mexico's 

agricultural, food, beverage, and tobacco sectors

Notes: FDI= Foreign direct investment. Chart is based on the sectoral distribution of total net inflows ($48.1 billion) during 

1999-2013. 

Source: USDA, Economic Research Service, using data from México, Secretaría de Economía, Dirección General de 

Inversión Extranjera (2014).

Agricultural production and related services, 2%

Preparation of

milling products

21%

Freezing of fruit,

vegetables, and

prepared meals

 11%

Production of sweets, gum,

and confectionery products

that are not of chocolate, 9%

Other food

industries

 8%

Beer production

29%

Production of soft drinks,

other nonalcoholic beverages,

and ice, and the purification

and bottling of water, 15% 

Other beverage industries, 0%

Tobacco

industry

5%
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Figure 4

Food sales by U.S.-owned affiliates in Canada and Mexico greatly exceed 

U.S. processed food exports to those countries

Note: Affiliate sales are those of nonbank majority-owned U.S. affiliates and do not include sales in the beverage 

industry.

Source: USDA, Economic Research Service, using data from U.S. Department of Commerce, Bureau of Economic 

Analysis (2014a) (affiliate sales) and USDA/FAS (2014a) (processed food exports).

U.S. dollars (billions)

0

5

10

15

20

25

30

35

1999 00 01 02 03 04 05 06 07 08 09 10 11 12

Calendar year

Sales in Canada by U.S. affiliates

Processed food exports to Canada

Sales in Mexico by U.S. affiliates

Processed food exports to Mexico

Figure 5

U.S. and Mexican wheat prices follow more similar patterns under NAFTA

Notes: NAFTA = North American Free Trade Agreement. Years in figure correspond to agricultural years in Mexico and 

marketing years in the United States. 

Source: USDA, Economic Research Service, using data from SAGARPA/SIAP (2014a); and USDA/NASS (2014b). 

Price of wheat (U.S. dollars per metric ton)

0

50

100

150

200

250

300

350

1991 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13

United States

Mexico
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tomatoes), the U.S.-Mexican tomato market is shown to be the most integrated, followed by the 

markets for onions and peppers. In a study of U.S. and Mexican white corn prices during the period 

1998-2005, Motamed et al. (2008) discover that U.S. and Mexican prices lack a common relationship over the long run.

Integration of agricultural markets within individual NAFTA countries may also be incomplete, 

particularly in Mexico where the level of economic development can vary substantially from one 

region to another. Of the six commodities studied by Avendaño Ruiz et al., the avocado market is 

the most integrated within Mexico, while the strawberry market is the most integrated within the 

United States. In the white corn study by Motamed et al., the researchers determine that state-level 

prices in Mexico do not respond strongly to a national price. Instead, they find that the prices of 

some states—the neighboring states of Chiapas and Oaxaca in the south, for instance—are closely 

related, while the prices of the two largest white corn-producing states—Sinaloa and Jalisco—affect 

prices in many other states.
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A North American Market for Grains, Oilseeds, and 

Related Products

Creation of a far more integrated North American market in grains, oilseeds, and related products 

is one of NAFTA’s major achievements. For Mexico, NAFTA marked a transformation from the 

strict administration of imports via licensing requirements and the provision of guaranteed prices to 

domestic producers of many field crops to a system featuring duty-free trade with the United States 

and Canada and a mix of domestic agricultural supports similar to those in the United States. For the 

United States and Canada, trade liberalization of grains and oilseeds under NAFTA primarily involved 

the removal of minor tariffs on bilateral trade. Recent elimination of the single-desk trading status of 

the Canadian Wheat Board further advances the integration of the North American market.

Rising Demand for Feed and Food Drives Integration

Rising demand for feed and food has created new opportunities for intraregional trade in grains and 

oilseeds. Poultry and hog producers in Mexico, for instance, rely heavily on imported feedstuffs as 

they seek to meet their country’s growing demand for meat. These imports come primarily from 

the United States, although Canada is a regular supplier to Mexico of rapeseed and rapeseed oil. In 

2013, Mexico imported from Canada about 1.4 million metric tons of rapeseed and 23,000 metric 

tons of rapeseed oil. Because of growing feed demand in Mexico and the liberalization of U.S.-

Mexico agricultural trade, U.S. exports to Mexico of feed grains, oilseeds, and related products 

increased from an annual average of 8.3 million metric tons during 1989-92 to 18.5 million metric 

tons per year during 2008-12 (fig. 6).16 In 2013, these exports dropped to 14.5 million metric tons 

due to the adverse effects of the 2012 drought on U.S. grain and oilseed production. To make up for 

this shortfall, Mexico increased its imports of corn and soybeans from South America.

Duty-free access to U.S. and Canadian feedstuffs enables Mexican livestock producers to expand 

output and lower their costs of production—thereby making possible a substantial increase in Mexican 

meat consumption. Between 1993 and 2013, per capita consumption in Mexico rose from 16 to 32 

kilograms (an increase of 90 percent) for poultry meat (broiler plus turkey) and from 10 to 16 kilograms (60 percent) for pork.17 Canada’s poultry and hog producers also use some U.S. feedstuffs—

most notably corn and soybean meal—and use of corn by Canada’s ethanol producers has expanded, 

although growth of corn-based ethanol production in Canada is expected to slow (Ting, 2014).

A close examination of U.S. trade statistics (see app. tables 1-4) reveals that feedstuff trade among the 

NAFTA countries encompasses a diversity of products, in addition to traditional bulk commodities such 

as corn, sorghum, wheat, soybeans, rapeseed, and oilseed oils and meals. There is substantial two-way 

trade between Canada and the United States in mixed feeds and mixed feed ingredients other than pet 

food, as well as of U.S. exports to Mexico of preparations used for animal feeding (other than pet food 

and bird seed) and brewers’ and distillers’ dregs and waste. This latter category includes DDGS.

16The years 1989-92 are used as the pre-NAFTA period for purposes of comparison because U.S. corn exports to 

Mexico were unusually low in 1993, the last year prior to NAFTA’s implementation.

17Per capita consumption levels were calculated using consumption estimates from USDA/FAS (2014b) and 

population estimates from U.S. Department of Commerce, Bureau of the Census (2013).
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The quadrupling of U.S. wheat and rice exports to Mexico during the NAFTA period has helped 

to limit a decrease in Mexican wheat consumption and boost Mexican rice consumption. Mexico’s 

population grew from 90 million to 119 million (33 percent) between 1993 and 2013, but the area 

planted with rice and wheat in Mexico is lower than it was during the early 1990s.18 In 2013, annual 

per capita wheat consumption in Mexico equaled about 55 kilograms, 8 percent lower than in 1993, 

while per capita rice consumption equaled about 7.2 kilograms, 33 percent higher than in 1993. 

In 2013, U.S. rice exports to Mexico reached about 861,000 metric tons (product-weight basis), 

compared with 256,000 in 1993. Per capita rice consumption in Mexico is still low relative to other 

parts of Latin America, suggesting the possibility of further growth in U.S. rice exports to Mexico 

(Juarez, 2014).

U.S. Corn Exports to Mexico More Than Quadruple in 

Volume

NAFTA provided much of the legal framework for the expansion in U.S. corn exports to Mexico 

over the past two decades. Compared with their average annual volume during the decade prior to 

NAFTA (1984-93), these exports have more than quadrupled. The export volume for 2012, 10.1 

million metric tons, included 8.5 million metric tons of conventional corn, 1.5 million metric tons 

18By comparison, Canada’s population increased from 29 million to 35 million (19 percent) between 1993 and 2010, 

while the U.S. population grew from 260 million to 316 million (19 percent).

Figure 6

U.S. feedstuffs are crucial to Mexican pork and poultry production

Note: Feedstuffs are defined as encompassing the commodity groupings of feed grains and products, feeds and fodders 

(excluding oilcake), and oilseeds and products.

Source: USDA, Economic Research Service, using data from USDA/FAS (2014a) (exports) and SAGARPA/SIAP 

(2014b) (production).

Million metric tons Million metric tons (carcass weight)

1989 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13

U.S. feedstuff exports to Mexico (left axis)

Mexican pork & poultry production (carcass weight, right axis)

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

0

2

4

6

8

10

12

14

16

18

20

22
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of DDGS, and 129,000 metric tons of cracked corn, which consists of broken or ground kernels and 

is used to feed livestock (fig. 7).19 U.S. corn exports (including cracked corn and DDGS) to Mexico 

accounted for 31 percent of Mexico’s supply during 2008-12, compared with 16 percent during 

1984-93.20 Yellow corn, used primarily to feed livestock or to manufacture starch, makes up the 

bulk of U.S. corn exports to Mexico. White corn, used mainly to make tortillas and other corn-based 

foods, accounted for about 7 percent of these exports during 2008-12.

Prior to NAFTA, Mexico strictly regulated corn imports through the use of licensing requirements. 

As part of NAFTA, Mexico established a set of transitional duty-free TRQs for U.S. and Canadian 

corn that gradually expanded during the period 1994-2007 and were finally eliminated in 2008. 

These TRQs were far too small to accommodate Mexico’s growing demand for corn. To remedy 

this constraint, the Mexican Government customarily issued import permits beyond the amount 

required by NAFTA at tariff rates far below the over-quota tariff allowed by NAFTA, particularly for yellow corn. Cracked corn was not covered by the transitional TRQs, and as recently as 

2007, U.S. cracked corn exports to Mexico were as high as 2.7 million metric tons. With the end of 

19We discuss exports for 2012 rather than 2013 because exports in 2013 were unusually small due to the drought of 

2012.

20Data in this sentence were calculated using trade data from USDA/FAS (2014a) and production estimates from 

USDA/FAS (2014b) that correspond to marketing years rather than calendar years.

Figure 7

Distillers dried grains with solubles complement U.S. corn exports to Mexico 

Notes: DDGS = distillers dried grains with solubles. Yellow and mixed corn exports are calculated by subtracting white 

corn exports from total corn exports. The harmonized tariff system defines DDGS and cracked corn (broken or ground 

kernels) as distinct commodities from corn.

Source: USDA, Economic Research Service, using data from U.S. Department of Commerce, Bureau of the Census, 

Foreign Trade Statistics, as cited by USDA/FAS (2014a) (total corn and cracked corn exports), and USDA/AMS 

(1991-2005, 2006-14) (white corn exports).

Million metric tons

0

2

4

6

8

10

12

DDGS

White

Cracked

Yellow and mixed

1991 93 95 97 99 01 03 05 07 09 11 13
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NAFTA’s transitional restrictions, Mexico’s cracked corn imports have been replaced almost in 

their entirety by imports of conventional corn.

Mexican corn production has increased during the NAFTA period in response to rising feed demand 

for meat production and sustained levels of total corn demand for direct human consumption, 

although production tapered off during 2008-12 due to adverse weather conditions. Still, during that 

period, production was 58 percent higher than during 1984-93 (fig. 8). Much of this increase stems 

from the devotion of more irrigated land to corn and the cultivation on those lands of new hybrids 

that provide yields comparable to those in the United States. Rainfed cultivation of corn also 

has trended upward during the NAFTA period, due in part to yield improvements. Rainfed lands 

account for about 45 percent of Mexican corn production, and a year with unusually dry weather 

can negatively affect the country’s total corn production, as was the case in Mexico’s 2009 and 

2011 agricultural years.

Barriers Removed From U.S.-Canada Trade in Wheat and 

Wheat Products

NAFTA contributed to expanded U.S.-Canada trade in wheat and wheat products (see app. tables 

1-2) by removing a number of significant barriers to this trade. The agreements eliminated the tariffs 

that formerly governed bilateral trade in wheat and wheat products, as well as Canada’s licensing 

requirements for the importation of U.S. wheat and wheat products. Some of the tariffs in effect 

Figure 8

Mexican corn production has increased during the NAFTA period, although this growth 

is now slowing

NAFTA = North American Free Trade Agreement. 

Source: USDA, Economic Research Service, using data from SAGARPA/SIAP (2014a).

Million metric tons

0

5

10

15

20

25

Irrigated

Rainfed

Total

1980 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12
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prior to 1989 discouraged bilateral trade. For instance, certain types of pasta traded between the two 

countries faced tariffs as high as 17.5 percent.

During the first 5 years of CUSTA (1989-93), U.S. wheat imports from Canada increased from an 

annual average of about 274,000 metric tons during 1984-88 to nearly 1.8 million metric tons in 

1993. This increase was due not only to the trade policy changes fostered by CUSTA but also to 

new international trading rules within the URAA that required Canada to eliminate the transportation subsidies provided under the Western Grain Transportation Act (WGTA) for moving grains 

from producing areas to the country’s export terminals. Removal of these subsidies encouraged less 

of an east-west orientation and more of a north-south orientation for Canadian wheat shipments. 

A relatively weak Canadian dollar also played an important role in increased U.S. demand for 

Canadian wheat during the 1990s. Today, wheat from Canada is a small, routine component of the 

U.S. wheat supply. Canadian wheat exports to the United States averaged 2.4 million metric tons 

per year during 2009-13, accounting for about 3 percent of the U.S. supply.

Canadian Government Ends Canadian Wheat Board’s 

Single-Desk Trading Status

In August 2012, the CWB lost its “single-desk” trading authority to operate a national monopsony (i.e., single buyer) for wheat and barley produced in Alberta, Manitoba, Saskatchewan, and 

the Peace River District of British Columbia and destined for export or for human consumption in 

Canada, as the result of legislation enacted by the Canadian Government in December 2011. This 

legislation further requires that the CWB be privatized not later than 2016, and Canada’s wheat and 

barley farmers have the option to decide whether to use the services of the CWB.

Although the end of the CWB’s single-desk status and its transformation to a private-sector firm 

are not required by NAFTA, these developments increase the integration of North America’s wheat 

and barley markets to a high level by enabling Canadian farmers to market their output through the 

private sector, much like their U.S. and Mexican counterparts. In addition, these reforms greatly 

change an institution that had been viewed by some participants in the sector as the source of unwelcome distortions in the international wheat market. For many years, the U.S. Government and the 

U.S. wheat industry argued that the CWB “took sales” from U.S. wheat producers through various 

noncommercial activities, including the cross-subsidization of sales among various buyers, the sale 

of wheat with higher protein content at the price of lower protein product, and the use of its special 

privileges, such as government support of its borrowing of funds, to generate a “financial cushion” 

to discount export prices (Goodloe, 2004; Schnepf, 2004). 

The economic impacts of the CWB’s reformation are still being evaluated. According to Carter 

and Loyns (1996), the end of the single desk would lead to higher farm prices for wheat and barley 

in Canada. Following record Canadian production of grain and oilseeds in 2013, wheat shipments 

via truck increased to points near the Manitoba/North Dakota border, a possible sign of a further 

strengthening of the north-south orientation to Canadian wheat trade or of rail congestion for westbound shipments. Since the end of single-desk authority, Canadian grain farmers have focused more 

on developments other than the CWB’s privatization, including the stresses placed on the country’s 

grain handling and transportation system by record crops in 2013 and logistical problems resulting 

from adverse weather conditions (Ting, 2014).
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NAFTA Facilitates Expansion of Canada’s Rapeseed Sector

Trade liberalization under NAFTA has helped to facilitate a major development in Canadian agriculture—the emergence of a stronger and more vibrant rapeseed sector with a sizable presence 

in the North American oils market. Prior to 1989, the United States and Canada each maintained 

import tariffs on vegetable oils produced using the oilseed most commonly grown in the other 

country. Specifically, the United States applied rates of 7.5 percent on Canadian rapeseed oil, and 

Canada applied rates of 7.5 to 15.0 percent on U.S. soybean oil. These rates were high enough to 

discourage bilateral oil trade without prohibiting it altogether.

NAFTA’s elimination of these import tariffs was timely for Canadian rapeseed growers, as a GM 

variety of rapeseed was approved by Canadian authorities in 1995. With duty-free access to the U.S. 

and Mexican vegetable oil markets, access to rapeseed varieties that were suited to the Canadian 

climate and easier to cultivate, elimination of the Gross Revenue Insurance Program (GRIP) that 

had held crop land in wheat production, and favorable prices for rapeseed compared with other 

crops, Canadian farmers devoted more land to rapeseed production. Between marketing years 

1988/89 and 2014/15 (August to July), Canada’s area harvested with rapeseed increased from 3.7 

million hectares to 7.8 million hectares, while area harvested with wheat dropped from 12.9 million 

hectares to 9.3 million hectares (USDA/FAS, 2014b). The resulting increase in rapeseed production 

provided the basis for a large increase in Canadian rapeseed oil exports. In 2013, U.S. and Mexican 

imports of Canadian rapeseed oil equaled 1.3 million metric tons and 29,000 metric tons, respectively, with a combined value of $1.6 billion. By contrast, U.S. imports of rapeseed oil equaled 

99,000 metric tons, with a value of $45 million, in 1988.
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Livestock and Animal Product Markets Experience 

Further Integration

NAFTA has played an important role in advancing the formation of a single North American market 

for livestock and animal products, primarily by phasing out tariff and quota barriers governing intraregional trade and by encouraging greater cooperation among the member governments on sanitary 

regulations. Among the more significant trade barriers eliminated by the two agreements were 

Mexico’s import permit requirements for U.S. poultry meat and dairy products; Mexico’s import 

tariffs on various livestock and animal products from Canada and the United States, which had rates 

as high as 20 percent; and the import quotas that formerly restricted U.S.-Canada trade in beef and 

in slaughter and feeder cattle.21

With the implementation of NAFTA, there are many signs of increased integration in North 

America’s livestock and animal product markets. Between 1993 and 2013, annual intraregional 

trade in such products increased from $4.6 billion to $15.5 billion. Two-way trade in beef and 

pork between Canada and the United States and in beef between Mexico and the United States is 

an important component of this trade and occurs in much larger quantities than prior to NAFTA 

(app. tables 1-4). U.S. poultry meat and pork exports to Mexico are also substantial, averaging 

$1.0 billion and $891 million per year, respectively, during 2011-13. In addition, U.S. livestock 

producers purchase large numbers of hogs and cattle from Canada and cattle from Mexico for 

finishing and slaughter in the United States, with the resulting meat being sold either in the United 

States or abroad. However, Mexican and U.S. authorities have not yet negotiated a zoosanitary 

protocol that would allow Mexico to import slaughter cattle from the United States; numerous feedlots in Mexico have expressed interest in such imports (Hernandez, et al., 2014).

NAFTA, however, did not liberalize trade in dairy, poultry, and egg products between Canada and 

the United States or between Canada and Mexico. For these products, Canada has a long-standing 

commitment to supply management—a production and management system that relies upon TRQs 

with prohibitively high over-quota tariffs as a means of strictly controlling import quantities. A 

future trade agreement involving the NAFTA countries—at either the multilateral, superregional, 

regional, or bilateral level—could conceivably broaden U.S. and Mexican access to Canada’s dairy, 

poultry, and egg product markets. No such agreement has been secured, although these markets may 

be subject to discussions as part of the negotiations for the Trans-Pacific Partnership (TPP), which 

involves all three NAFTA countries plus nine other countries in the Pacific Rim. For those livestock 

and animal product sectors where intraregional free trade already exists, the key to further integration lies mainly in greater coordination of sanitary regulations, strengthening of effective control 

measures for prevention or elimination of animal diseases, including enhanced monitoring and 

surveillance, and the prevention of unjustified conditions that could lead to trade restrictions.

21See Hahn et al. (2005) for a discussion of these quotas.
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U.S. Nonfat Dry Milk and Chicken Leg Quarters Gain DutyFree Access to Mexico

Two U.S. animal products—nonfat dry milk (NFDM) and chicken leg quarters (CLQs)—did not 

gain duty-free access to the Mexican market until January 1, 2008. NFDM is the leading U.S. dairy 

product exported to Mexico, and it is the only item among livestock and animal products that was 

subject to a 14-year (1994-2007) transitional TRQ under NAFTA. Trade liberalization has allowed 

U.S. dairy producers to respond to rising Mexican demand for NFDM, a product that tends not to be 

produced in large quantities in Mexico, except during the rainy season when fluid milk production 

is often higher (Hernandez et al., 2013: 7). During 2009-13, U.S. NFDM exports to Mexico averaged about 161,000 metric tons per year, compared with an annual average of about 40,000 metric 

tons during 1989-93 (the 5 years before NAFTA). There is no obvious seasonal pattern in this trade, 

suggesting that U.S. product broadly augments Mexico’s NFDM supply, rather than complementing 

the domestic milk supply during those times of the year when production is customarily low.

The main buyers of NFDM in Mexico are private-sector processors who reconstitute the product 

and then sell it in the form of pasteurized or ultra-high-temperature (UHT) milk. Prior to 2006, 

LICONSA, a Mexican parastatal enterprise that provides nutritional assistance to low-income 

households, was the country’s largest holder of NFDM stocks. Since then, LICONSA has shifted 

toward the purchase and distribution of fluid milk as a means of supporting domestic dairy production (Hernandez and Branson, 2011: 5, 9).

Although NAFTA’s transition to free trade for U.S. poultry meat exports to Mexico ended on 

January 1, 2003, U.S. CLQ exports to Mexico were subject to a temporary safeguard TRQ that 

lasted until the start of 2008. This safeguard, intended to limit the quantity of CLQ sales beyond 

Mexico’s border regions, was the product of a bilateral agreement signed by the U.S. and Mexican 

Governments in July 2003 at the encouragement of industry representatives and was not one of 

NAFTA’s transitional restrictions. The end of the safeguard has allowed larger volumes of U.S. 

CLQs into the interior of Mexico. During 2009-13, Mexican imports of chicken legs, thighs, or legs 

and thighs in one piece (the category in the import data that includes CLQs) from the United States 

averaged 249,000 metric tons per year, compared with 173,000 metric tons in 2007, the last year of 

the safeguard. CLQs are an attractive and affordable product for consumers who wish to prepare a 

meal featuring chicken but not to purchase a whole chicken.

Rising Mexican imports of U.S. CLQs have been accompanied by allegations that some of these 

imports were priced below the U.S. cost of production. In February 2011, the Mexican Government 

launched a formal antidumping investigation of this subject, and in August 2012, it published its 

final decision: chicken leg and muscle imports from four suppliers who had cooperated with the 

investigation would be subject to an AD duty of 25.7 percent, while imports from other suppliers 

would be subject to a duty of 127.5 percent (México, Secretaría de Economía, 2012). However, 

the Mexican Government has opted not to apply these duties while Mexico’s domestic poultry 

market stabilizes following outbreaks of HPAI in 2012 and 2013 (Hernandez and Branson, 2013). 

As of November 2014, Mexican authorities recognized 11 of Mexico’s States as being free of both 

the H5N2 and H7N3 types of avian influenza (AI) (México, SAGARPA/SENASICA, Dirección 

General de Salud Animal, Dirección de Epidemiologia y Análisis de Riesgo, 2014).
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Regionalization of Sanitary Standards Facilitates Meat Trade

Both Article 716 of NAFTA and Article 6 of the WTO Agreement on the Application of Sanitary 

and Phytosanitary Measures require, when possible, the regionalization of trade-related sanitary and 

phytosanitary standards. In the case of livestock and animal product trade, regionalization of sanitary 

standards allows exports to flow from regions within a country that are free of contagious foreign 

animal diseases, even if those diseases are endemic in another part of that country. Once an outbreak 

of a specific animal disease is identified, the national government of the importing country makes a 

risk assessment to determine if trade restrictions can be defined along regional lines in such a way that 

international trade may continue. Recognition of a disease-free or low-risk region, however, does not 

guarantee that meat processors in that region will be allowed to export their product. Processors also 

must be certified by their national governments as being eligible to export and may be subject to audits 

by the importing country’s government.22 Such audits sometimes result in the decertification of individual meat processing plants, either on a temporary or a permanent basis.

Regionalization is an important facilitator of meat trade. With respect to U.S.-Canada trade, the 

definition of Canada as a minimal-risk region for bovine spongiform encephalopathy (BSE) by 

U.S. regulators in 2004 led to the resumption of Canadian cattle and beef exports to the United 

States several years later. As part of activities organized under through the Canada-U.S. Regulatory 

Cooperation Council (RCC), the Canadian Food Inspection Agency (CFIA) and USDA’s Animal 

and Plant Health Inspection Service (APHIS) have prioritized its efforts to recognize each other’s 

zoning decisions if a foreign animal disease outbreak, such as foot-and-mouth disease (FMD) or 

another highly contagious foreign animal disease, were to occur in either country. The APHIS-CFIA 

team is establishing a framework mechanism to minimize trade disruptions while safeguarding 

animal health in both countries.

With respect to U.S.-Mexico trade, regionalization has enabled U.S. poultry meat exports to Mexico 

to continue largely uninterrupted in the face of localized outbreaks of low pathogenic AI in specific 

counties in the States of Minnesota, Kentucky, and Tennessee in 2009 (San Juan, 2009; Williams, 

2009; San Juan, 2010) and Missouri in 2011 (Branson, 2011). In addition, Mexican authorities 

have worked with their U.S. counterparts to regionalize U.S. sanitary standards related to Classical 

Swine Fever (CSF) and Exotic Newcastle Disease (END). This effort has fostered modest levels of 

Mexican pork and poultry meat exports to the United States, but the opportunities to export fresh or 

frozen product to the United States are still limited, discussed in the next paragraph. In 2013, U.S. 

imports of pork and poultry meat from Mexico equaled about $22 million (6,000 metric tons) and 

$14 million (4,000 metric tons), respectively. Unprocessed frozen product other than carcasses, half 

carcasses, and hams, shoulders, and cuts thereof with bone in accounts for most of the pork imports 

22Responsibility for determining whether to approve the importation of meat, poultry, and egg products into the United 

States is shared by two USDA agencies. USDA’s Animal and Plant Health Inspection Service (APHIS) is responsible for 

evaluating the animal health status of foreign countries and specific regions within those countries, as well as the risk of 

introducing disease into the United States via the importation of commodities from those countries or regions; these evaluations help to determine whether a specific country or region is eligible to export specific meat, poultry, or egg products 

to the United States. USDA’s Food Safety and Inspection Service (FSIS) is responsible for ensuring that meat, poultry, 

and egg products imported to the United States are produced under standards equivalent to U.S. inspection standards and 

are safe, wholesome, unadulterated, and properly labeled and packaged. In the countries that are eligible to export such 

products to the United States, FSIS certifies and decertifies establishments that are allowed to participate in this trade, and 

it audits the inspection systems of those countries. USDA/APHIS (2014a) summarizes the evaluations of the animal health 

status of foreign countries with respect to certain diseases, while USDA/FSIS (2014) contains the audit reports and lists of 

foreign establishments.
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from Mexico, while prepared meals of chicken account for most of the poultry meat imports. 

Mexico is a far more active exporter of pork to Japan and South Korea. Such exports totaled $411 

million (76,000 metric tons) in 2013.

The U.S. and Mexican governments currently do not share the same assessment of the sanitary 

situation in Mexico with respect to CSF and END. As of September 2014, the United States recognizes nine Mexican States—Baja California, Baja California Sur, Campeche, Chihuahua, Nayarit, 

Quintana Roo, Sinaloa, Sonora, and Yucatán—as being free of CSF and lists those States as eligible 

to export raw pork to the United States under certain conditions (USDA/APHIS, 2014a; USDA/

FSIS, 2014). In addition, the United States recognizes three Mexican States—Campeche, Quintana 

Roo, and Yucatán—as being free of END and lists two specific meat-processing establishments 

in Mexico as being eligible to export raw poultry to the United States, but only if that poultry 

originated in the United States or another END-free country eligible to export to the United States 

(USDA/APHIS, 2014a; USDA, FSIS, 2014). All regions in Mexico are eligible to export processed 

pork and poultry meat to the United States.

Mexican authorities state that they have much wider geographic control over CSF and END. In 

January 2009, the Mexican Government declared its entire territory to be free of CSF following 

a nationwide eradication campaign, and in July 2013, it recognized all of Mexico to be free of 

END (México, SAGARPA/SENASICA, Dirección General de Salud Animal, Dirección de 

Epidemiologia y Análisis de Riesgo, 2014). By comparison, the United States considers CSF 

to have been eradicated within the United States and Canada, with the last outbreak of END in 

the United States occurring during 2002-03. Industry sources cited by Hernandez (2003) believe 

that recognition of Mexico as being free or at low risk of CSF would lead to expanded access for 

Mexican pork not only in the U.S. market but also elsewhere, while recognition of Mexico as being 

disease free of END and AI would allow U.S. processors to use broilers originating and slaughtered 

in Mexico (Hernandez, et al., 2014).

In response to requests submitted by the Mexican Government in 2007, 2008, and 2009 seeking 

recognition of CSF-free status in an increasingly larger number of Mexican States and finally all 

of Mexico, USDA/APHIS (2014b) published a proposed rule that would define a new region in 

Mexico as being of low risk of CSF. This new region would consist of all Mexican States that 

APHIS does not recognize as CSF-free, except for the State of Chiapas. The proposed rule would 

allow the importation of fresh pork and pork products from the low-risk region under certain conditions. For instance, the pork would need to be obtained from swine raised on farms where CSF 

antigen exposure has not been detected and contained in such a fashion as to prevent exposure to 

other swine, wildlife, and swine products. In the proposed rule, APHIS explained its reasoning for 

not recognizing all of Mexico as CSF-free, based on an assessment of the risk of CSF spreading to 

the U.S. swine population via the importation of pork and pork products from the Mexican States 

not recognized by APHIS as CSF-free. Risk factors identified include “serologic evidence, found 

in some Mexican States as recently as 2012, of exposure to swine to the CSF virus”; “the lack 

of uniformity in the quality of epidemiological investigations of CSF suspect cases in Mexico”; 

and “the existence of common land borders between some Mexican States and neighboring 

CSF-affected countries” (USDA/APHIS, 2014b).
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Trade Liberalization and Sanitary Cooperation Facilitate Beef 

Exports to Non-NAFTA Countries

Trade liberalization and sanitary cooperation among the NAFTA countries have strengthened the 

ability of North American beef producers to compete in markets outside the NAFTA region. Upon 

NAFTA’s implementation in 1994, the member countries immediately removed all remaining tariff 

and quota barriers to intraregional trade in cattle and beef, a policy change that has allowed such 

trade to grow well beyond previous levels.23 Moreover, NAFTA gives cattle producers in each 

member country duty-free access to the full range of feedstuffs, livestock, and other inputs produced 

in the North American free-trade area, enabling North American beef to be more competitive in 

quality and price. For Mexican producers, this development has facilitated the emergence of a 

larger feedlot sector, the compression of beef production timelines, the production of lean beef with 

a smoother texture, and an increase in beef exports (Peel et al., 2011). In 2013, Mexico exported 

about 129,000 metric tons ($701 million) of beef—primarily to the United States, in part due to 

drought-related declines in U.S. production. In 1993, U.S. beef imports from Mexico equaled 1,000 

metric tons ($3 million).

The NAFTA countries have a long history of cooperating on sanitary issues involving livestock and 

animal products. Perhaps the most important example over the past two decades is the establishment 

of greater control over the risk factors associated with BSE.24 In response to the discovery of this 

disease in Canada in May 2003 and in the United States in December 2003,25 a number of countries 

within and outside of NAFTA imposed sanitary restrictions on cattle and beef from Canada and, 

to a lesser extent, the United States. In the years that followed the BSE discoveries, the NAFTA 

governments made a concerted effort to coordinate their sanitary policies related to BSE, to upgrade 

international standards in this area, and to modify their sanitary requirements gradually for specific 

types of cattle and beef, usually based on the age of the animal, in order to achieve the resumption 

of intraregional trade in cattle and beef.26 The modification of Mexican regulations in April 2014 to 

allow the importation of beef and beef by-products obtained from U.S. cattle of any age is the most 

recent step toward the normalization of this trade (Branson and Hernandez, 2014).

Efforts toward the reestablishment of intraregional cattle and beef trade were accompanied by 

concomitant work to regain U.S. and Canadian access to the beef markets of non-NAFTA countries, 

such as Japan, Hong Kong, South Korea, and Taiwan, which had imposed import bans on U.S. and 

Canadian beef following the BSE detections. Both U.S. and Canadian beef exports to non-NAFTA 

countries have surpassed the levels that existed prior to the BSE findings, an indication that the 

industry has largely recovered from BSE-related disruptions. In 2013, U.S. beef exports to nonNAFTA countries equaled 565,000 metric tons, 5 percent higher than in 2002 (the year before the 

23Mexican tariffs on U.S. and Canadian beef offals, however, were phased out over a 9-year period.

24BSE is a fatal neurological disease in adult cattle that is also a concern to human health. Some studies have linked 

the agent that causes BSE to a similar disorder in humans, most likely through the consumption of food ingredients 

obtained from BSE-infected cattle (USDA/APHIS, 2006).

25A total of 17 animals in Canada have been discovered to have BSE since May 2003. The most recent Canadian 

discovery (February 2010) was a 71-month-old beef cow in Alberta (Canadian Food Inspection Agency, 2014). In the 

United States, a total of 4 animals have been discovered to have BSE since May 2003. The most recent U.S. discovery 

(April 2012) was a dairy cow at the age of 10 years and 7 months in California (USDA/APHIS, Veterinary Services, 2012). 

No BSE discoveries have been reported for Mexico.

26Detailed summaries of these efforts are available in Zahniser and Crago (2009) and Zahniser (2007).
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BSE discoveries); Canadian beef exports to non-NAFTA countries reached 43,000 metric tons, 39 

percent higher than in 2002.

The immediate prospects for North American beef exports are constrained by supply factors, as 

cattle inventories in all three NAFTA countries have decreased. At the start of 2014, beef cattle 

inventories were 22 percent lower than their 2002 level in the United States, 16 percent lower in 

Canada, and 33 percent lower in Mexico (USDA/FAS, 2014b). High grain prices over the past 

several years have discouraged producers from increasing their herds. Industry consolidation in 

Canada has contributed further to lower herd numbers, while periods of drought in several cattleproducing regions in the United States and Mexico have deteriorated pasture conditions. While dry 

pastures in Mexico led to a short-term increase of feeder cattle exports to the United States in 2011 

and 2012, Mexican herds declined significantly, lowering important supplies of feeder cattle for the 

Southwestern United States.

WTO Dispute on Country-of-Origin Labeling Moves to 

Compliance Proceedings

Concerns about the effects of mandatory country-of-origin labeling (COOL) by the United States 

on the integration of U.S. and Mexican cattle production, U.S. and Canadian cattle production, and 

U.S. and Canadian hog production are at the center of the Canadian and Mexican disputes with 

U.S. COOL requirements at the World Trade Organization (WTO). Mandatory COOL provides 

U.S. consumers with greater information about the geographic origin of their retail food purchases. 

Specifically, U.S. retailers are required to provide COOL for the following products: muscle cuts of 

beef (including veal), lamb (including mutton), pork, chicken, and goat; ground meat (beef, lamb, 

pork, chicken, or goat); peanuts, pecans, ginseng, and macadamia nuts; perishable agricultural 

commodities (i.e., fresh or frozen fruit and vegetables); and wild and farm-raised fish and shellfish.

The United States imports live cattle from Mexico and Canada and live hogs from Canada for 

finishing or immediate slaughter. Mexico has exported feeder cattle to the United States on a regular 

basis for over a quarter century (Mitchell et al., 2001). In 2013, Mexican cattle exports to the United 

States equaled about 989,000 head, most of which were feeder animals. This number fluctuates from 

year to year and has averaged 1.2 million head per year since 2000. Market conditions and weather, 

especially drought, significantly affect the number of feeder cattle imported by the United States 

from Mexico in any given year.

Canada exports large numbers of both live cattle and live hogs to the United States for growing, 

finishing, and slaughter. Following the steady decline in Canadian cattle inventories from 2005 to 

2011 and in Canadian hog inventories from 2006 to 2009, these exports are now smaller than when 

the decline in inventories was in full swing. Between 2008 and 2013, Canadian cattle exports to 

the United States decreased from 1.2 million to 1.0 million head, while corresponding hog exports 

decreased from 9.3 million to 5.0 million.

Implementation of mandatory COOL is the responsibility of USDA’s Agricultural Marketing 

Service (AMS). The final rule originally applicable to muscle cuts and ground meat took effect on 

March 16, 2009 (table 4) and was contested soon after by the Canadian and Mexican Governments, 

which filed separate complaints at the WTO alleging that the labeling requirements were inconsistent with U.S. obligations under international trade agreements. In November 2009, a single panel 

was established to examine the complaints. In November 2011, a panel report was circulated to 
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members—finding, among other things, that the requirements violated Article 2.1 of the WTO’s 

Technical Barriers to Trade (TBT) Agreement by giving less favorable treatment to imported cattle 

and hogs from Canada and imported cattle from Mexico relative to like domestic product. The panel 

also found that the requirements violated Article 2.2 of the TBT Agreement by not fulfilling their 

legitimate objective of providing consumers with origin information.

In March 2012, each NAFTA country notified the WTO’s Dispute Settlement Body (DSB) of its 

intention to appeal some of the panel’s findings. The Appellate Body’s report was circulated on June 

29, 2012. In that report, the Appellate Body upheld the finding that the law offered less favorable 

treatment to Canadian cattle and hog producers and Mexican cattle producers because of increased 

recordkeeping and verification requirements. However, the Appellate Body reversed the finding that 

mandatory COOL was inconsistent with Article 2.2, under the reasoning that “the COOL measure 

does contribute, at least to some extent, to achieving its objective.” Instead, the Appellate Body 

alleged that the origin information provided to consumers was far less than the amount of information collected from producers.

As the United States informed the DSB of its intention to implement the Appellate Body’s findings, AMS issued a new final rule for muscle cuts that took effect on May 23, 2013 (table 4). 

The new rule requires labeling of muscle cuts to indicate clearly the country in which each major 

step in production (born, raised, and slaughtered) occurred. In addition, the new rule prohibits 

the comingling of muscle cuts from animals of different national origins if slaughtered during the 

Table 4

The United States issued a new final rule for mandatory country-of-origin labeling in response to a 

WTO ruling

Product

Final Rule that took effect 

March 16, 2009 Final Rule that took effect May 23, 2013

Muscle cuts from animals born, raised, 

and slaughtered in the United States

“Product of U.S.A.” “Born (Hatched), Raised, and Slaughtered in the U.S.”

Muscle cuts from animals born, raised, 

and slaughtered outside the United 

States

“Product of Country X” Same as in 2009 Final Rule

Muscle cuts from animals born and 

raised outside the United States and 

slaughtered in the United States

“Product of Country X and the U.S.A.” “Born and Raised in Country X, Slaughtered in the United States”

Muscle cuts from animals born outside 

the United States but raised and slaughtered in the United States

“Product of U.S.A., Country X, and 

Country Y (as applicable),” where 

Country X (or Y) designate the country 

of birth.

“Born in Country X, Raised and Slaughtered in the United States”

Muscle cuts from animals born and 

raised outside the United States and 

slaughtered in the United States, comingled in a single production day with 

muscle cuts from animals born, raised, 

and slaughtered in the United States

“Product of U.S.A., Country X, and 

Country Y (as applicable)”

Such comingling is no longer allowed 

under the 2013 rule

Ground meat Retailer must identify all countries where 

product originated or all reasonably possible countries where product may have 

originated

Same as in 2009 Final Rule

Sources: USDA, Economic Research Service, using USDA, Agricultural Marketing Service (2009, 2013).
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same production day at the same facility; such comingling was allowed under the 2009 final rule. 

Canada and Mexico, however, disagreed with the U.S. position that the new rule had brought the 

United States into full compliance with the DSB’s recommendations and rulings. Citing further 

harm, Canada and Mexico requested that a compliance panel be assembled. A WTO resolution was 

provided to the three governments in July 2014, and the compliance panel’s report was circulated to 

WTO Members in October 2014. According to a summary provided by the WTO, the report indicates that the detrimental effect of the Final Rule’s “labelling and recordkeeping requirements could 

not be explained by the need to convey to consumers information regarding the countries where 

livestock were born, raised, and slaughtered” (World Trade Organization, 2014a). In November 

2014, the United States filed an appeal of the ruling.
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A Highly Integrated Fruit and Vegetable Market

Trade liberalization under NAFTA, along with cooperation on phytosanitary issues, has helped to 

raise the integration of North America’s fruit and vegetable markets from a medium to a high level. 

Many aspects of intraregional fruit and vegetable trade have been free of tariffs and quotas for more 

than a decade, and with the removal of NAFTA’s last set of agricultural trade restrictions in 2008, 

regional fruit and vegetable trade is now free of such obstructions.

Intraregional fruit and vegetable trade has increased substantially since the implementation of 

NAFTA, and Mexican growers in particular have benefited from this expansion (fig. 9). Mexico’s 

annual exports of fruit and vegetables to the United States (including juice)27 have more than tripled 

during the NAFTA period, approaching $9.4 billion in 2013. These exports have their roots in 

the development and growth over the past half century of a vibrant Mexican fruit and vegetable 

sector that is strongly oriented toward the U.S. market. Many of the U.S. import tariffs on Mexican 

produce in effect prior to NAFTA were designed on a seasonal basis (i.e., they were scheduled for 

the part of the year when U.S. production was on the market). Some of these tariffs were quite high. 

For example, Mexican asparagus faced a seasonal tariff of 25 percent.

27The trade data in this section include fruit and vegetable juice as part of the total trade in fruit and vegetables.

Figure 9

U.S. fruit and vegetable trade with Canada and Mexico has grown substantially 

during the NAFTA period

Notes: NAFTA = North American Free Trade Agreement. 

Trade data in this figure include juice.

Source: USDA, Economic Research Service using data from USDA/FAS (2014a).

Billions of U.S. dollars

0

1

2

3

4

5

6

7

8

9

10

Calendar year

U.S. exports to Mexico

U.S. imports from Mexico

U.S. exports to Canada

U.S. imports from Canada

1990 92 94 96 98 00 02 04 06 08 10 12
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Annual U.S. fruit and vegetable exports to Mexico also have more than tripled under NAFTA, 

reaching about $1.4 billion in 2013. These exports have benefited from the rapid expansion of 

Mexico’s supermarket sector during the NAFTA period. Several U.S. supermarket chains operate 

in Mexico. As of November 2014, Texas-based H-E-B had a total of 43 stores in the Mexican 

States of Coahuila, Guanajuato, Nuevo León, San Luis Potosí, and Tamaulipas (Supermercados 

Internacionales H-E-B, 2014), and Wal-Mart was operating 2,114 stores throughout Mexico with 

formats including grocery sales (Wal-Mart de México y Centroamérica, 2014). Mexican supermarket chains also purchase large quantities of U.S. produce.

Completion of U.S.-Canada trade liberalization for fruit and vegetables, along with broader application of greenhouse technologies to Canadian vegetable production, has fostered greater integration of 

the two countries’ fruit and vegetable markets. At the aggregate level, U.S. fruit and vegetable imports 

from Canada have grown substantially during the NAFTA period. In 2013, these imports equaled 

$3.1 billion, compared with $213 million in 1988 and $318 million in 1993. At the commodity level, 

Canada has emerged as an important supplier to the United States of fresh greenhouse tomatoes, 

peppers, and cucumbers; fresh-market mushrooms; and fresh and frozen potatoes (app. table 2). U.S. 

tariffs on Canadian fruit and vegetables were generally small prior to 1989, with the exception of fresh 

mushrooms, which faced restrictions with an ad valorem tariff equivalent of about 28 percent on a 

trade-weighted, annual basis. U.S. growers have been active in the Canadian market for some time, 

particularly during the winter months. In 2013, U.S. fruit and vegetable exports to Canada approached 

$5.8 billion, compared with $639 million in 1988 and $1.9 billion in 1993.

The establishment of phytosanitary protocols during the NAFTA period for the importation of fresh 

avocados from Mexico has enabled this product to become a major component of intraregional 

agricultural trade. In 2013, U.S. fresh avocado imports from Mexico totaled about 510,000 metric 

tons, with a value of $992 million, and Canadian fresh avocado imports from Mexico totaled 46,000 

metric tons, with a value of $115 million. Currently, the United States only allows the importation 

of Mexican fresh avocados from 24 municipalities in the State of Michoacán, but avocado producers 

in other Mexican States have expressed interest in being certified to export to the United States, 

an activity that would require the establishment of appropriate phytosanitary protocols (Flores and 

Olson, 2013a).

Establishment of trade-facilitating phytosanitary protocols is also important for U.S. produce 

growers. In May 2014, for example, Mexico’s National Service of Agrifood Health, Safety, and 

Quality (SENASICA) published procedural requirements that allow U.S. table stock potatoes 

and potatoes for processing to exported to any part of Mexico. This issue had been the subject of 

negotiations by the U.S. and Mexican Governments over a 10-year period, as previous rules only 

allowed for such products to be imported into the 16-mile zone immediately along the U.S.-Mexico 

border (Olson and Flores, 2014). Several weeks after the new procedural requirements took effect, 

however, a Mexican District Court Judge in Los Mochis, Sinaloa, issued an injunction that indefinitely suspended their implementation—a ruling that was based on a perceived lack of scientific 

evidence regarding the safety of U.S. potatoes with respect to the possible introduction of pests to 

Mexican agriculture and the environment (Olson, 2014).
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Importance of Imports to U.S. Fruit and Vegetable Supply Increases

As a result of the heightened integration of North America’s fruit and vegetable market, imports 

from the NAFTA countries have increased in their share of the U.S. fruit and vegetable supply. In 

2011, Mexico and Canada combined supplied about 13 percent of the fresh or frozen fruit available in the United States and 17 percent of the available fresh or frozen vegetables. In 1990, these 

shares each equaled 6 percent. By comparison, countries outside NAFTA supplied 39 percent of the 

available fresh or frozen fruit in 2012 and 3 percent of the available fresh or frozen vegetables. In 

1990, these shares equaled 29 percent and 1 percent, respectively. Changing diets and the development of off-season supplies of fresh produce outside the United States have fostered a shift in U.S. 

consumption away from processed fruits and vegetables and toward fresh produce. In 2011, fresh 

produce accounted for 50 percent of the U.S. fruit and vegetable supply (excluding juice), up from 

45 percent in 1990.28

Net imports (i.e., imports minus exports) provide further evidence of the increased reliance on 

imports to meet U.S. fruit and vegetable demand (table 5). Prior to NAFTA, net imports from 

Mexico exceeded 15 percent of the U.S. supply for a wide variety of produce, including fresh 

tropical fruit with little U.S. production (limes, fresh mangos, and fresh papayas), fresh asparagus, 

broccoli and cauliflower for processing, chile peppers, fresh cucumbers, squash, and fresh tomatoes. Since NAFTA’s implementation, several of these commodities—fresh limes, fresh papayas, 

watermelon, squash, and fresh tomatoes—increased by at least 10 percentage points in this measure. 

Net imports from Canada now account for a larger portion of the U.S. supply of bell peppers, fresh 

cucumbers, and fresh tomatoes than they did in the early 1990s due to the growth of the Canadian 

greenhouse industry. Net imports divided by U.S. disappearance are negative for those commodities 

where the United States is a net exporter to the trade partner in question (i.e., the world, Mexico, or 

Canada). For instance, during 2010-12, U.S. cantaloupe exports to Canada averaged about 229,000 

metric tons per year, while corresponding imports averaged less than 1,000 metric tons per year. 

The resulting net exports (about 229,000 metric tons) corresponded to about 20 percent of U.S. 

disappearance of cantaloupe.

28The statistics in this paragraph were calculated using U.S. per capita food availability data from USDA/ERS (2014), 

and import data from U.S. Department of Commerce, Bureau of the Census, Foreign Trade Statistics, as cited by USDA/

FAS (2014a).
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Table 5

Net imports from Mexico and Canada now account for a larger share of the availability of certain fruit and 

vegetables in the United States than they did before NAFTA

Commodity

Net imports divided by U.S. disappearance Per capita use

from world from Mexico from Canada Average

1991-93 2010-12 1991-93 2010-12 1991-93 2010-12 1991-93 2010-12

Percent Kilograms

Selected fruit:

Avocados, fresh1 4 64 0 49 -2 -6 0.7 2.0

Cantaloupe 19 29 11 -0 -4 -20 3.9 3.7

Grapes, fresh1 15 21 4 9 -13 -8 3.4 3.6

Limes, fresh1 66 100 82 98 -3 -0 0.4 1.2

Mangos, fresh2 92 100 85 67 -2 -0 0.4 1.1

Papayas, fresh 8 94 27 72 -9 -2 0.1 0.5

Strawberries, fresh -8 -1 2 11 -9 -11 1.6 3.4

Watermelon 1 15 5 20 -5 -7 6.3 6.8

Selected vegetables:

Asparagus, fresh 12 85 30 46 -13 -1 0.3 0.7

Bell peppers 24 48 11 49 -7 3 2.5 4.9

Broccoli and cauliflower, 

processing3 66 94 31 57 0 0 1.4 1.3

Chile peppers 35 79 16 42 -3 -0 2.3 3.1

Cucumbers, fresh 28 60 31 51 -6 6 2.2 3.2

Eggplant 19 43 34 44 -15 -8 0.2 0.4

Mushrooms, fresh1 -3 8 -0 1 -2 5 0.9 1.2

Onions, fresh 2 3 7 7 -4 -3 7.4 8.8

Potatoes, fresh 1 -0 -0 -2 1 3 22.5 16.1

Snap beans, fresh -4 13 6 15 -10 -6 0.6 0.9

Squash4 23 50 19 42 -1 -1 1.7 2.0

Tomatoes, fresh 9 48 16 15 -7 2 7.1 9.3

1For these commodities, marketing years 1990/91, 1991/92, and 1992/93 are compared with marketing years 2009/10, 2010/11, and 2011/12.

2Net imports also include mangosteens and guavas and some dried product.

3Exports are assumed to equal zero in the net import calculations.

4Squash exports are estimated as 5 percent of miscellaneous vegetable exports in the net import calculations.

Sources: USDA, Economic Research Service presentation of data from Thornsbury, et al. (2014) (vegetable data); Perez and Plattner (2013) 

(fruit data); and USDA/FAS (2014a) (trade data).
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U.S. Dry Beans Constitute a Larger and Steadier Portion of Mexican Supply

Dry beans are the main commodity among fruit and vegetables29 for which transitional restrictions 

under NAFTA were eliminated on January 1, 2008. For the period 1994-2007, NAFTA specified 

gradually less restrictive TRQs for U.S. and Canadian exports to Mexico of dry beans belonging to the 

species Phaseolus vulgaris, or “common” beans. Common beans encompass many varieties, including 

black, pinto, kidney, navy, Great Northern, small white, pink, cranberry, and small red beans. Prior to 

NAFTA, Mexico tightly controlled the importation of dry beans through the use of import licensing.

Trade liberalization under NAFTA has enabled U.S. dry beans to account for a larger and steadier portion 

of Mexico’s dry bean supply, although exports still continue to fluctuate due to weather-related conditions affecting production in either country (fig. 10). During marketing years (MYs) 2009/10 to 2013/14 

(September 2009 to August 2014), imports from the United States accounted for about 11 percent of 

Mexico’s dry bean supply (when calculated as imports divided by the sum of domestic production and 

total imports from all countries), compared with 5 percent during MYs 1988/89 to 1992/93. U.S. exports 

of dry common beans to Mexico averaged equaled about 126,000 metric tons per year during MYs 

2009/10 to 2013/14, compared with 62,000 metric tons during MYs 1988/89 to 1992/93.30

29Dry beans are classified as a vegetable in USDA’s Foreign Agricultural Trade of the United States data system and 

as both a vegetable and a protein food in the Dietary Guidelines for Americans (U.S. Department of Health and Human 

Services and U.S. Department of Agriculture, 2010). Yet the U.S. dry bean sector resembles the U.S. grain and oilseeds 

sector in terms of large farms and capital intensity—both features that reflect the comparative advantage of U.S. dry bean 

exporters—and many U.S. dry bean farmers also grow grains and/or oilseeds.

30An ERS report co-authored with investigators from SAGARPA (Zahniser et al., 2010) provides a fuller analysis of 

the U.S. and Mexican dry bean sectors.

Figure 10

NAFTA has enabled U.S. dry common beans to become a larger portion of Mexican supply

Notes: NAFTA = North American Free Trade Agreement. Production statistics used to generate this figure correspond to 

Mexico’s agricultural year, which is divided into two production cycles: fall/winter and spring/summer. For dry beans, 

Mexico’s 2012 agricultural year covers the crops planted from October 2011 to March 2012 (fall/winter 2011/12) and 

from April to September 2012 (spring/summer 2012). To compare U.S. exports with Mexican production, we matched 

U.S. marketing years and Mexican agricultural years so that the starting year of the marketing year is the same number 

that denotes the agricultural year. For instance, U.S. marketing year 2012/13 is matched with Mexico’s 2012 agricultural 

year. This enables us to compare the quantities of U.S. and Mexican dry beans that are on the market at roughly the 

same time.

Source: USDA, Economic Research Service, using data from USDA/FAS (2014a) and SAGARPA/SIAP (2014a).

Metric tons (thousands) Percent

0

2

4

6

8

10

12

14

0

20

40

60

80

100

120

140

160

180

200

Marketing year (September to August)

U.S. exports to Mexico (left axis)

U.S. share of Mexican supply, 

five-year moving average (right axis)
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Implementation of FDA Food Safety Modernization Act Moves Forward

In January 2011, President Obama signed into law the FDA Food Safety Modernization Act 

(FSMA), which makes a number of significant regulatory changes concerning fruit and vegetable 

production and trade. In the United States, the U.S. Food and Drug Administration (FDA) is the 

Federal agency with primary responsibility for ensuring the safety of domestic and imported fresh 

produce.31 Article 712 of NAFTA recognizes the right of each member country to use sanitary and 

phytosanitary measures “in order to protect human, animal, or plant life or health in its territory,” 

as long as those measures are based on scientific principles, do not discriminate among the NAFTA 

partners, and are not trade restrictions in disguise.32

FSMA contains many provisions that are likely to affect fruit and vegetable trade with Canada 

and Mexico, four of which are discussed here. First, FSMA requires the FDA to adopt regulations 

providing for minimum science-based standards for the safe production and harvesting of those 

types of fruit and vegetables that are raw agricultural commodities for which the FDA determines 

that such standards would minimize the risk of serious adverse health consequences or death. 

To this end, the FDA issued a Proposed Rule for Produce Safety (Standards for the Growing, 

Harvesting, Packing, and Holding of Produce for Human Consumption) in January 2013. The 

Proposed Rule addresses various identified routes of microbial contamination of produce, including 

agricultural water, biological soil amendments of animal origin, health and hygiene of farm 

personnel, domesticated and wild animals, and equipment, tools, and buildings. It also contains 

provisions covering the topics of sprouts and personnel training (FDA, 2013a). 

The FDA extended the deadline for comments on the Proposed Rule for Produce Safety and 

received a great deal of feedback from the private sector and research community, particularly with 

respect to the Proposed Rule’s possible effects on farms of different sizes. In response, the FDA 

decided to revise parts of the proposed rule—including the sections on water quality standards and 

testing, standards for using raw manure and compost, the definition of a farm, and procedures for 

withdrawing the qualified exemption for certain farms (Taylor, 2013). In September 2014, the FDA 

published its revised Proposed Rule for Produce Safety and solicited further comments on these 

revisions (FDA, 2014b).

To avoid placing an undue burden on smaller farms and food producers, the FDA proposed an 

outright exemption from the Produce Rule for those farms with average annual produce sales during 

the previous 3 years of $25,000 or less (on a rolling basis), while FSMA itself specifies a qualified exemption for other growers. To qualify for this exemption in a given calendar year, a farm 

must meet both of the following conditions: (1) the farm’s total food sales during the previous 3 

years were valued at an annual average less than $500,000, adjusted for inflation; and (2) more than 

half of the farm’s total food sales during the previous 3 years were made directly to “qualified end 

users”—defined by FSMA to include (a) individual consumers (not businesses), regardless of location, and (b) restaurants or retail food establishments located in the same State as the farm or not 

more than 275 miles from the farm. Growers with a qualified exemption must comply with certain 

labeling requirements.

31The FDA is the Federal agency responsible for the safety of all food products, with some exceptions, including meat, 

poultry, and egg products, which are primarily regulated by USDA’s Food Safety and Inspection Service (FSIS).

32In 2012, Canada enacted a major food safety law of its own, called the Safe Food for Canadians Act.
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Second, FSMA requires the FDA to allocate resources to the inspection of domestic high-risk facilities that manufacture, process, pack, or hold foods and of importers according to their known safety 

risks. Risk factors specified by FSMA for domestic high-risk facilities include, but are not limited to, 

the known safety risks of the food in question, the compliance history of the facility, and the rigor 

and effectiveness of the facility’s hazard analysis and risk-based preventive controls. Risk factors 

specified for importers include but are not limited to the known safety risks of the countries through 

which the food is transported, the compliance history of the importer, the rigor and effectiveness of the 

importer’s activities to satisfy the requirements of the foreign supplier verification program, and the 

importer’s participation, or lack thereof, in the voluntary qualified importer program.

Third, FSMA requires the FDA to implement more frequent inspections of both U.S. and foreign 

facilities. Domestic high-risk facilities must be inspected at least once during the first 5 years of 

the Act and at least once during each 3-year period that follows. Domestic facilities not deemed to 

be of high risk must be inspected at least once during the first 7 years of the Act and at least once 

during each 5-year period that follows. With respect to foreign facilities, FSMA requires the FDA 

to inspect not fewer than 600 facilities during the first year of the Act, and during each of the next 

5 years, not fewer than twice the number of foreign facilities inspected in the previous year. In 

fiscal year (FY) 2012, the FDA and the States under contract with FDA inspected or attempted to 

inspect 24,462 domestic food facilities not deemed to be of high risk, and the FDA inspected 1,342 

foreign food facilities and 8,023 domestic food facilities deemed to be of high risk. The FDA also 

re-inspected another 3,736 domestic, high-risk food facilities that it had inspected or attempted to 

inspect in FY 2011 (FDA, 2013b).33 In order to work more closely with foreign regulatory authorities, the FDA has positioned staff in about a dozen foreign locations, including a post in Mexico 

City opened in 2009 as part of its Latin American Office (FDA, 2009). FDA does not have a 

similar post in Canada, but FDA has a long-standing cooperative relationship with the Canadian 

Government in the investigation of emergency situations, just as it does with Mexico (FDA, 2010).

Fourth, FSMA gives the FDA the authority to develop regulations that would require importers 

to share responsibility and be accountable for preventing food safety problems. In exercise of this 

authority, the FDA issued a Proposed Rule for Foreign Supplier Verification Programs (FSVP) for 

Importers of Food for Humans and Animals in July 2013 and revised provisions in September 2014. 

The proposed rule requires food importers (with some exemptions) to develop, maintain, and implement an FSVP that would include, in general, compliance status review, hazard analysis, verification activities, corrective actions, periodic reassessment of the FSVP, importer identification, and 

recordkeeping. In its most recent revisions, FDA has proposed a provision for required supplier 

verification activities that is a hybrid of two options presented in the originally proposed rule. 

Specifically, importers would be given the flexibility to determine appropriate verification measures 

based on food and supplier risks, but annual, on-site auditing of the supplier would be required 

when there is reason to believe that hazard would cause serious injuries or deaths. Comments on the 

revised provisions are being accepted until December 15, 2014 (FDA, 2014a).

One aspect of regulatory cooperation among national governments that is present in the FDA’s 

work on FSMA is the recognition that the public and private sectors of foreign countries are important stakeholders in the U.S. regulatory system. Summary sheets for the Proposed Rule for FSVP, 

for instance, are available not only in English, Spanish, and French (the main languages of the 

33The figures cited in this sentence are approximate and may be revised as the records for FY 2012 are finalized.
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NAFTA countries) but also in nine other languages. One objective of the U.S.-Mexico High-Level 

Regulatory Cooperation Council (HLRCC) is to intensify dialogue between the two countries 

on the implementation of FSMA. To this end, Mexico’s Secretariat of Economy and the FDA’s 

Latin America Regional Office held four informational workshops on FSMA in 2013, each in a 

different part of Mexico. In addition, the FDA’s regional office conducted outreach activities on two 

proposed FSMA rules: the Produce Rule and the Preventive Controls for Food for Humans. These 

activities included information on how to offer comments on the proposed rules and how to receive 

further information on forthcoming FSMA implementing regulations (U.S.-Mexico HLRCC, 2013). 

In September 2013, the FDA held a similar outreach session with Canadian stakeholders to solicit 

feedback on the Produce Rule, the Preventative Controls for Food for Humans, the FSVP, and 

Accreditation of Third-Party Auditors/Certification Bodies to Conduct Food Safety Audits and to 

Issue Certifications (Dessureault, 2013).

The Search for Risk-Mitigating Tools for Intraregional 

Produce Trade Continues

For more than two decades, USDA’s Agricultural Marketing Service has encouraged the development of risk-mitigating tools for produce trade among the NAFTA countries. This effort is guided 

by the belief that buyers and sellers of produce in the NAFTA region would benefit from the establishment of a North American version of the Perishable Agricultural Commodities Act (PACA) 

of 1930. Under PACA, which was enacted to promote fair trading practices in the U.S. fruit and 

vegetable industry, sellers must ship the quantity and quality of produce specified in their contracts, 

and buyers must accept shipments that meet contract specifications.

The first major achievement of this effort was recorded in 1999, when a group of produce and transportation companies from each NAFTA country formed the Fruit and Vegetable Dispute Resolution 

Corporation (DRC). The DRC describes itself as “a non-profit, membership-based organization 

serving the produce trade.” Its main services include the provision of “harmonized standards, procedures and services ... to help [members] avoid commercial disputes” and when disputes do occur, 

“consultation, mediation and arbitration services to resolve the issue in a timely and cost-effective 

manner” (Fruit and Vegetable DRC, 2014b). The DRC was created in direct response to Article 707 

of NAFTA, which called for an advisory committee on private commercial disputes regarding agricultural goods.

One noteworthy innovation by the DRC is the creation of a multistep dispute resolution system that 

begins with preventative activities and cooperative problem-solving and then proceeds gradually to 

more binding measures (Fruit and Vegetable DRC, 2014a). Gómez et al. (2012) find that the DRC 

has facilitated produce transactions within the NAFTA region and provided an improved setting for 

resolving disputes in the fruit and vegetable trade—particularly in Canada, where the pre-existing 

licensing and arbitration system suffered from some deficiencies. Citing the corporation’s administrative records, the authors emphasize that from 2000 to 2010, the DRC addressed about 1,300 

disputes involving fresh fruit and vegetable trade valued at roughly $32 million.

U.S. and Canadian firms currently make up the majority of the DRC’s members, while the organization’s Mexican membership primarily consists of exporters rather than importers. In 2007, the DRC 

closed its office in Mexico, citing the country’s lack of infrastructure for destination inspection and 

limited interest among Mexican wholesalers and retailers (Fruit and Vegetable DRC, 2007). This 

low level of interest may also reflect the relative size of U.S. fresh or frozen fruit and vegetable 
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exports to Mexico, which equaled about $906 million in 2013, compared with $8.4 billion of corresponding U.S. imports from Mexico.

Even with the DRC in place, Canada still does not have a statute that effectively protects out-ofcountry produce suppliers from buyers that default on their payment obligations, while Canadian 

suppliers to U.S. firms are protected by the PACA Trust provisions. To address this difference, the 

U.S. and Canadian Governments continue to work on the development of “comparable approaches 

to financial risk mitigation tools to protect U.S. and Canadian fruit and vegetable suppliers from 

buyers that default on their payment obligations”—this time within the framework of the U.S.-

Canada RCC. The two governments now agree that “a single dispute resolution body approach is a 

critical step toward achieving comparable approaches and outcomes between Canada and the U.S. 

in terms of financial protection for sellers of fresh produce” (Miller and Parrott, 2014). Currently, 

the Canadian Government requires that produce dealers operating in Canada on an interprovincial or international basis either be a member of the DRC or be registered with the Canadian Food 

Inspection Agency (CFIA). In October 2014, USDA revoked the special status that Canadian 

produce shippers had previously enjoyed under PACA. With the revocation of this status, Canadian 

shippers will now be treated like shippers from any other foreign country and will need to post a 

bond for twice the amount of the claim to seek payment from delinquent U.S. buyers. Several media 

reports indicate that this action was taken because the Canadian Government has not yet instituted a 

risk-mitigation system similar to PACA, after years of work on this subject (Fresh Produce Alliance, 

2014; Linden, 2014; The Packer, 2014).

New Antidumping Suspension Agreement for Tomato 

Imports From Mexico Takes Effect

In March 2013, the U.S. International Trade Commission suspended an antidumping duty investigation regarding tomatoes imported from Mexico, after Mexican tomato growers and nongrower 

exporters reached an agreement with the U.S. Department of Commerce that established a new set 

of floor prices for tomatoes imported from Mexico. The new agreement replaces a previous suspension agreement that was first implemented in 1996 and then revised in 2004 and 2008 (Flores and 

Olson, 2013b). All fresh or chilled tomatoes from Mexico are covered by the new floor prices. Fresh 

tomatoes are Mexico’s second-leading agricultural export to the United States. In 2013, the United 

States imported 1.4 million metric tons of fresh tomatoes from Mexico, with a value of $1.6 billion.

The new suspension agreement differs from the previous agreement in two key respects. First, the 

new agreement sets different floor prices for open field/adapted-environment, controlled-environment production, and specialty tomatoes (defined in the agreement to include grape, cherry, heirloom, and cocktail tomatoes). This differentiation better reflects the structure of the tomato market 

and the pricing of different types of tomatoes at different times of the year. Second, the new floor 

prices are substantially higher than the old ones, increasing the likelihood that the floor prices have 

a binding effect on market prices. A simple comparison of the price floors, old and new, and the unit 

value of U.S. tomato imports from Mexico from November 2012 to October 2013 (table 6) suggests 

that while the old price floors were in many instances not binding, the new price floors may raise the 

price of some specialty tomatoes such as grape tomatoes. The new agreement’s impact on consumer 

welfare is not clear, however, since one would need to compare the new price floors with a counterfactual scenario in which the antidumping investigation was allowed to run its course.
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Table 6

The higher floor prices set by the new antidumping duty investigation suspension agreement for fresh 

tomato imports from Mexico are more likely to be binding on prices

Floor prices

Agreement/product July 1 through October 22 October 23 through June 30

Cents per pound

2008 agreement 21.69 17.20

2013 agreement

Open field and adapted environment 31.00 24.58

Controlled environment 41.00 32.51

Specialty, loose 51.00 35.68

Specialty, packed 59.00 46.79

Unit value of U.S. tomato imports from Mexico

Product July-October 2013 November 2012-June 2013

Cents per pound

All tomatoes 53.13 52.701

Greenhouse tomatoes 69.62 66.75

Cherry tomatoes 66.79 63.10

Grape tomatoes 48.99 58.59

Roma tomatoes 36.48 36.11

Other tomatoes 78.11 39.13

Sources: USDA, Economic Research Service, using data from USDA/FAS (2014a) (unit values) and U.S. Department of Commerce (2013a, 

2013b) (floor prices).
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Unusually Abundant Crops Alter Conditions in the 

U.S.-Mexico Sugar and Sweetener Markets

Free trade between the United States and Mexico in sugar and high-fructose corn syrup (HFCS) 

started in FY 2008, following the settlement of a protracted dispute about how best to implement 

NAFTA’s provisions for these commodities. As a result of this agreement, integration of the two 

countries’ markets for sugar and HFCS quickly reached a high level, and bilateral free trade in these 

commodities increased significantly (fig. 11). Imports from Mexico accounted for about 12 percent 

of the U.S. sugar supply during FYs 2011-13, compared with a negligible share prior to NAFTA.34

Meanwhile, HFCS has gained greater acceptance among Mexican manufacturers of soft drinks and 

processed foods, although the United States still uses more HFCS on a per capita basis than does 

Mexico. In FY 2013, Mexico’s per capita domestic sweetener use included an estimated 13 kilograms of HFCS, compared with 21 kilograms for the United States.35

34The figure of 12 percent is calculated using the import and total supply data from Haley (2014a).

35The per capita consumption statistics were calculated using population estimates from U.S. Department of 

Commerce, Bureau of the Census (2013), U.S. HFCS consumption estimates from Haley (2013), and Mexican HFCS 

consumption estimates from Haley (2014c).

Figure 11

Trade liberalization under NAFTA has led to substantial trade in sugar and fructose

Notes: NAFTA = North American Free Trade Agreement. Fructose is defined to include high-fructose corn syrup (HFCS) 

and crystalline fructose.

Source: USDA, Economic Research Service, using data from USDA/FAS (2014a) (sugar imports) and Haley (2014b) 

(fructose exports).

Metric tons (thousands)

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

1996 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14

Fiscal year

Fructose exports to Mexico Sugar imports from Mexico
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In contrast, integration of the U.S. and Canadian sugar markets remains at a low level because 

NAFTA exempted U.S.-Canada trade in sugar and sugar-containing products from the process of 

intraregional trade liberalization. Nevertheless, the U.S. and Canadian markets for processed foods 

are highly integrated, and there is a moderate level of trade in sugar-containing products between 

the two countries (app. tables 1-2). Following the establishment of free trade in sugar between the 

United States and Mexico, U.S. imports of sugar-containing products from both Canada and Mexico 

tended to level off.

The integrated U.S.-Mexico sugar and sweetener markets were shaken by much bigger than usual 

sugarcane and sugar beet crops during the past 2 FYs. The United States and Mexico combined 

produced about 15.5 million metric tons of centrifugal sugar in FY 2013 and 15.0 million metric 

tons in FY 2014, compared with an annual average of 12.7 million metric tons during FYs 2008-12 

(table 7). This increased supply helped to lower sugar prices to levels not seen in about 5 years. The 

unit value of U.S. sugar imports from Mexico, for instance, dropped to $558 per metric ton in FY 

2013, compared with $829 per metric ton during FYs 2010-12 and $463 per metric ton during FYs 

2007-09.

Table 7

U.S. and Mexican sugar production

Fiscal year

2007 2008 2009 2010 2011 2012 2013 2014

Production of centrifugal sugar (PSD Online)

Total, U.S. and Mexico (1,000 metric tons) 13,295 13,248 12,093 12,339 12,599 13,051 15,537 14,944

Mexico, cane sugar (1,000 metric tons) 5,633 5,852 5,260 5,115 5,495 5,351 7,393 6,890

U.S., beet sugar (1,000 metric tons) 4,543 4,283 3,823 4,150 4,226 4,446 4,607 4,559

U.S., cane sugar (1,000 metric tons) 3,119 3,113 3,010 3,074 2,878 3,254 3,537 3,495

Unit value, U.S. imports of Mexican sugar 

(GATS, dollars per metric ton) 462.5 446.6 471.3 755.7 835.9 873.6 558.1 517.0

Mexico, cane sugar (Sistema INFOCaña)

Sugar production (1,000 metric tons) 5,314 5,521 4,962 4,826 5,184 5,048 6,975 n.a.

Area harvested (1,000 hectares) 675 683 663 647 673 704 780 n.a.

Yield (metric tons per hectare) 7.9 8.1 7.5 7.5 7.7 7.2 8.9 n.a.

U.S., beet sugar (Sugar and Sweetener Yearbook Tables)

Sugar production (1,000 metric tons) 4,543 4,283 3,780 4,151 4,227 4,446 4,605 4,521

Area harvested (1,000 hectares) 528 505 407 465 468 491 487 467

Yield (metric tons per hectare) 8.6 8.5 9.3 8.9 9.0 9.1 9.5 9.7

U.S., cane sugar (Sugar and Sweetener Yearbook Tables)

Sugar production (1,000 metric tons) 3,111 3,134 3,004 3,080 2,868 3,265 3,542 3,322

Area harvested (1,000 hectares) 343 335 332 331 334 335 346 347

Yield (metric tons per hectare) 9.1 9.4 9.0 9.3 8.6 9.8 10.2 9.6

n.a. = not available.

Notes: The U.S. marketing year for sugar coincides with the fiscal year (FY) of the Federal Government, which starts on October 1

and ends on September 30. Production data from different sources may not match precisely.

Sources: USDA, Economic Research Service, using USDA/FAS (GATS, 2014a; PSD Online, 2014b); SAGARPA and CONADEZUCA (Sistema 

INFOCaña, 2014); and USDA/ERS (Sugar and Sweetener Yearbook Tables, 2014).
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Two factors account for this turn of events. First, Mexico’s area harvested with sugarcane increased 

from 673,000 hectares to 780,000 hectares between FY 2011 and FY 2013, according to Mexican 

statistics (table 7). Signs of increased investments and area expansion in the Mexican sugarcane sector 

were observed as early as April 2010 (Flores et al., 2010), and while the U.S. sugar program uses 

domestic marketing allotments to influence domestic production levels, the Mexican sugar program 

does not contain similar controls. Second, U.S. and Mexican sugarcane growers and U.S. sugar beet 

growers experienced higher than average yields in FY 2013, which further boosted supply.

In response to these developments, the U.S. and Mexican Governments have taken a number 

of steps to reduce the supply of sugar. The U.S. Government, through the Commodity Credit 

Corporation (CCC), issued waivers on Re-Export licenses, purchased sugar to preempt the forfeiture of marketing loans, and then resold sugar to ethanol producers under the Feedstock Flexibility 

Program (FFP). While the license waivers involved no program costs, the sugar acquisitions by 

the CCC incurred a net cost of nearly $259 million (Haley, 2014c). The Mexican Government has 

encouraged its domestic sugar producers to export to markets other than the United States, and 

its new National Program for the Sugarcane Agroindustry for 2014-18 (PRONAC—Programa 

Nacional de la Agroindustria de la Caña del Azúcar) aims to foster the development of a sugarcanebased ethanol sector in Mexico (Pérez U., 2014; Mexico, Secretaría de Agricultura, Ganadería, 

Desarrollo Rural, Pesca, y Alimentación, 2014a, 2014b; Valverde, 2014). In FY 2013, Mexico 

exported about 140,000 metric tons of sugar to countries other than the United States, compared 

with an annual average of 20,000 metric tons during FYs 2008-12.

Some participants in the U.S. sugar industry have alleged that the Mexican Government subsidized 

sugar exports to the United States and that Mexican sugar exports to the United States were sold 

at less than fair value. In response to a petition submitted by these participants, the United States 

launched antidumping duty (AD) and countervailing duty (CVD) investigations in March 2014 

regarding sugar imports from Mexico (USITC, 2014b). In August 2014, the U.S. Department of 

Commerce (USDOC) issued an affirmative preliminary decision in the CVD investigation and 

announced preliminary subsidy rates ranging from 2.99 percent to 17.01 percent, depending on the 

producer/exporter in Mexico (USDOC/ITA, 2014a). In October 2014, the USDOC announced its 

affirmative preliminary determination in the AD investigation and announced preliminary dumping 

margins ranging from 39.54 to 47.26 percent (USDOC/ITA, 2014c). However, on October 27, 

2014, the USDOC announced a mutually agreeable solution suspending both investigations. The 

draft CVD agreement initiated by the Mexican Government includes provisions for limiting the 

quantity of Mexican sugar exports to the United States, while the draft AD agreement initiated by 

representatives of Mexican sugar exporters includes reference prices for these exports. Both draft 

agreements were available for comments through November 18, 2014, and may be signed no earlier 

than November 26, 2014.
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Multilateral Trade Liberalization Reshapes the Cotton, 

Textile, and Apparel Markets

North America’s cotton, textile, and apparel markets became highly integrated during the first 7 years 

after NAFTA’s implementation, as a pattern of specialization emerged in which the United States 

supplied raw cotton and some intermediate inputs to Mexican textile and apparel producers and 

Mexico exported some of its textile and apparel output to the United States. With NAFTA’s liberalization of intraregional trade in cotton, textiles, and apparel, the trade flows associated with this pattern 

became much larger. Between 1993 and 2000, U.S. cotton exports to Mexico increased from 146,000 

to 369,000 metric tons, while Mexican textile and apparel exports to the United States grew from 

78,000 to 643,000 metric tons, cotton equivalent (fig. 12). At the same time, U.S. textile and apparel 

employment continued to decline, from 1.7 million in 1993 to 1.2 million in 2000 (U.S. Department 

of Labor, Bureau of Labor Statistics, 1994, 2001). The U.S. textile and apparel industries had been 

losing jobs since the 1970s, and while trade liberalization under NAFTA helped to reinforce this trend, 

the integration of the U.S. and Mexican cotton, textiles, and apparel sectors and NAFTA’s strict rules 

of origin may have helped the United States to retain jobs during the period 1994-2000 that otherwise 

would have relocated to other parts of the world (Zahniser and Link, 2002).

Multilateral trade liberalization under the WTO’s Agreement on Textiles and Clothing, however, 

has exposed the integrated U.S.-Mexico cotton, textiles, and apparel sector to much greater international competition. Through this agreement, China, Vietnam, and other non-NAFTA countries 

Figure 12

U.S. cotton exports to Mexico and U.S.-Mexico trade in cotton textiles declined 

substantially since the turn of the century

Source: USDA, Economic Research Service, using data from USDA, Economic Research Service (2014) (textile trade) 

and USDA/FAS (2014a) (cotton exports).

Metric tons (thousands)

0

100

200

300

400

500

600

700

1990 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13

Cotton textile exports to Mexico

Cotton textile imports from Mexico

U.S. cotton exports

to Mexico
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gained much broader access to the North American market, effectively diminishing the preferential 

access that Mexico’s textile and apparel sector previously had enjoyed in the United States and 

Canada. As a result, between 2000 and 2013, U.S. and Mexican textile and apparel production 

declined, U.S. textile and apparel employment dropped to 520,000 (U.S. Department of Labor, 

Bureau of Labor Statistics, 2014), and U.S. cotton exporters sought markets outside of Mexico. In 

2013, 8 percent of U.S. cotton exports went to Mexico, compared with 25 percent in 2000.

Since the turn of the 21st century, U.S. cotton exports to Mexico and bilateral trade in cotton 

textiles have all declined substantially. If this trend continues, U.S. cotton exports to Mexico will 

reach their pre-NAFTA levels within the next decade. Honduras, a member country of the Central 

America-Dominican Republic-United States Free Trade Agreement (CAFTA-DR), has surpassed 

Mexico to become the leading destination for U.S. exports of cotton textiles, with four other 

CAFTA-DR countries—the Dominican Republic, El Salvador, Guatemala, and Nicaragua—in 

the third, fifth, seventh, and ninth positions, respectively.36 This suggests that some U.S. partnerships with Mexican textile and apparel manufacturers have shifted to the CAFTA-DR region. 

Meanwhile, China, India, Pakistan, Bangladesh, and Vietnam have each surpassed Mexico as 

suppliers of cotton textiles to the United States. Canada has largely shifted away from the importation and milling of cotton and is no longer among the leading exporters of cotton textiles to 

the United States. Canada was the 23rd largest exporter of cotton textiles to the United States; in 

2000, it was the 7th largest (USDA/ERS, 2013).

36Costa Rica, the other member country of CAFTA-DR, was the 23rd leading destination of U.S. cotton textile exports 

in 2013.
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A North American Approach to Deeper Integration37

The NAFTA governments are charting a unique course as they work to deepen the economic relationship fostered by the agreement. To date, they have elected not to establish a new organizational 

structure such as a customs union or a common market38 that would take regional integration to a 

higher level—an approach that is different from that of the European Union (EU) and runs contrary 

to the counsel of some economists such as the late Bela Balassa (1961), who viewed a customs 

union as the next logical step after a free-trade area in the process of regional integration. Instead, 

the NAFTA governments are taking actions that increase the fluidity of cross-border economic 

activity without modifying the text of NAFTA or the free-trade area created by the agreement. Some 

of these actions rely upon organizational frameworks created by NAFTA, while others take place 

within new organizational frameworks created by the NAFTA governments over the past several 

years. In some instances, organizational frameworks created in conjunction with NAFTA are not 

currently being used on a regular basis.

From Regulatory Coordination to Regulatory Cooperation

Activities in the area of regulatory cooperation provide a clear example of the current North 

American approach toward deeper integration. The term “regulatory cooperation” has largely 

replaced the term “regulatory coordination” as a descriptor of these efforts. This change in terminology reflects the NAFTA governments’ emphasis on building national regulatory systems that fit 

together and facilitate trade, rather than simply making adjustments to existing regulatory systems 

so that they do not unnecessarily impede trade. For instance, the United States and Mexico are 

working to develop compatible electronic Export and Import Certificate programs for plants and 

plant products and eventually for animals and animal products as well, while the United States and 

Canada have created a common nomenclature system for meat cuts.

Regulatory cooperation now relies more heavily on bilateral organizational frameworks, rather 

than the trilateral frameworks that are a hallmark of NAFTA’s text. NAFTA established an extensive set of trilateral working groups and committees responsible for a wide variety of trade-related 

issues, such as the Committee on Sanitary and Phytosanitary Measures (Green et al., 2006), and 

it expresses the NAFTA governments’ continuing commitment to the North American Plant 

Protection Organization (NAPPO)—a trilateral forum created in 1976 “for public and private 

sectors in Canada, the United States, and Mexico to collaborate in the regional protection of agricultural, forest, other plant resources, and the environment while facilitating trade” (North American 

Plant Protection Organization, 2011: 4). In addition, from 2005 to 2009, the NAFTA governments 

channeled some efforts in regulatory cooperation through the Security and Prosperity Partnership 

(SPP), a trilateral framework created at the highest levels of government that was intended to 

increase the security and enhance the prosperity of the NAFTA countries through greater cooperation and information sharing (Zahniser and Roe, 2011).

Many concrete accomplishments in regulatory cooperation involving the NAFTA countries over 

the past 20 years were the product of trilateral efforts, such as the coordinated campaign by all 

37Some portions of the next two sections are drawn from Zahniser and Herrera Moreno (2014).

38A customs union is a free-trade area in which the member countries share a set of common external tariffs (CETs), 

while a common market is a customs union with the additional features of free movement of labor and capital.
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three countries to seek a harmonized approach to mitigating the risks associated with BSE and the 

expanded practice of sharing scientific studies and administrative evaluations among pesticide regulators and scientists in each NAFTA country (Green et al., 2006). But regulatory cooperation also 

took place within bilateral organizational frameworks, such as the intergovernmental Consultative 

Committees on Agriculture (CCAs), or through collaboration between governments at the working 

level. The CCAs provide a setting in which high-level agricultural and trade officials of the NAFTA 

governments meet on a bilateral basis to discuss various issues related to agricultural trade. The 

CCAs most recently met in December 2014 (U.S.-Canada and U.S.-Mexico) and August 2012 

(Canada-Mexico).

While many of NAFTA’s working groups and committees are still in operation, the trilateral SPP 

has been succeeded by several new bilateral frameworks: the U.S.-Mexico High Level Regulatory 

Cooperation Council, established in 2010, and the U.S.-Canada Beyond the Border (BtB) initiative and the U.S.-Canada Regulatory Cooperation Council, both established in 2011. Like the SPP, 

the BtB addresses mutual concerns in the areas of security and economic competitiveness, except 

on a bilateral (U.S.-Canada) rather than trilateral basis. By contrast, the HLRCC and RCC focus 

exclusively on regulatory concerns, both agricultural and nonagricultural. Relying more on bilateral frameworks is consistent with the long-standing recognition that some issues pertain to only 

two of the three NAFTA countries and that the regulatory priorities and capabilities of the NAFTA 

governments differ in ways that make it easier to cooperate on a bilateral basis. Creation of the 

new bilateral frameworks does not constitute an effort to abandon the trilateral working groups and 

committees established by NAFTA. That being said, bilateral frameworks currently seem to be the 

predominant approach for addressing intraregional SPS issues, as the most recent meeting of the 

trilateral NAFTA Committee on Sanitary and Phytosanitary Measures took place in July 2012.

Two key principles and innovative approaches to international regulatory cooperation stand out in 

the three bilateral frameworks. First, each country is viewed as a major stakeholder in the regulatory 

systems of the other country. This recognition is central, for instance, to the HLRCC’s objective of 

intensifying the dialogue between Mexico and the United States regarding the implementation of 

the U.S. FDA Food Safety and Modernization Act. To this end, Mexico’s Secretariat of Economy 

and the FDA’s Latin America Regional Office in Mexico held four informational workshops on 

FSMA in 2013, each in a different part of Mexico. In addition, the FDA’s regional office conducted 

outreach activities on two proposed FSMA rules: the Produce Rule and the Preventive Controls for 

Food for Humans. These activities included guidance on how to offer comments on the proposed 

rules and how to receive further information on forthcoming FSMA implementing regulations 

(U.S.-Mexico HLRCC, 2013).

Second, the new frameworks place strong emphasis on regulatory simplification. Several initiatives 

within the U.S.-Canada RCC, for instance, aim to reduce or eliminate certain inspection activities, 

certifications, and administrative procedures concerning food safety. As a step toward streamlining 

bilateral trade in meat and poultry products, the U.S. and Canadian Governments are working to 

identify options for simplifying or eliminating import certificates (Rathlou and Stanley, 2014), and 

the two governments are also taking steps so that “food safety laboratory testing conducted in one 

country is acceptable to regulators in both countries” (Pequignot and McGrath, 2014). The objective of regulatory simplification is also woven within several key principles of the U.S.-Mexico 

HLRCC’s work plan.
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Member Countries Gradually Revise NAFTA’s Rules 

of Origin

The NAFTA governments also have made adjustments to the agreement’s rules of origin in ways 

that facilitate agricultural trade. In a preferential trade agreement such as NAFTA, rules of origin 

determine whether a product originated from the area covered by the agreement and thus qualifies for its preferential tariff, which in NAFTA’s case is usually duty-free status. Since 2003, the 

NAFTA governments have made incremental changes to the accord’s rules of origin through the 

NAFTA Working Group on Rules of Origin (WGRO). A few of these changes apply directly to 

agriculture. For instance, one modification allows the regional content of certain cranberry juice 

mixtures to be determined by transaction value or net cost, rather than volume (Zahniser et al., 

2009), while another modification allows for certain crushed or ground spices produced in the 

NAFTA region to qualify for duty-free status even when they were obtained from spices (not 

crushed or ground) sourced outside the NAFTA region (USITC, 2009). During the latter half of 

2013, the USITC received comments on a new round of proposed changes to NAFTA’s rules of 

origin, including one that would affect miscellaneous edible preparations in HS Code 2103.90 

(Executive Office of the President of the United States, 2013).

Immigration Reform Intersects with Regional Integration

Regional integration is also affected by policy responses to issues that are largely separate from 

NAFTA, such as national immigration laws. As part of NAFTA, each member country agreed to 

allow the temporary entry of people from other member countries if they were business persons, 

traders, investors, or members of certain professions, but hired farm labor is not one of these professions. Nevertheless, certain labor-intensive sectors of U.S. agriculture, such as horticultural production, rely heavily on foreign-born workers, and many of these workers lack the immigration status 

needed to work legally in the United States. According to the U.S. Department of Labor’s National 

Agricultural Workers Survey (NAWS), roughly half of the hired labor force in U.S. crop agriculture 

is believed to be unauthorized, with the vast majority of these unauthorized workers coming from 

Mexico (Hertz, 2013).

The Federal Government already operates a program—the H-2A Temporary Agricultural Worker 

Program—that allows agricultural employers to hire foreign-born farmworkers who are not permanent residents of the United States on a temporary or seasonal basis. Its participation levels are small 

relative to the number of unauthorized immigrants working in U.S. agriculture. In FY 2013, the U.S. 

Department of Labor (USDOL) certified 98,813 positions for the program (USDOL/ETA, 2013: 

p. 30). By comparison, the number of hired laborers employed by U.S. agriculture in 2013 ranged 

from 596,000 in January to 906,000 in July, according to quarterly estimates (USDA/NASS, 2014a). 

While there are no annual limits to the number of H-2A workers who may enter the country, other 

aspects of the program limit its use. Since the program is only for temporary or seasonal workers, 

dairy, livestock, and nursery operations are largely precluded from participating. In addition, some 

prospective employers may be discouraged by the application process and other requirements of 

the program, including the requirement to pay H-2A workers the highest of the Federal or State 

minimum wage, the prevailing hourly or piece rate, the agreed-upon collective bargaining rate, or 

the adverse effect wage rate (AEWR), as determined by USDOL.

Recent sessions of the U.S. Congress have considered proposals to modify U.S. immigration law 

in ways that would affect the extent to which the U.S. and Mexican markets for hired farm labor 
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are integrated. One proposal would create a mechanism by which many of the sector’s unauthorized workers and their families could apply for at first temporary and eventually permanent legal 

residency in the United States. One expert assessment of this proposal’s potential implications for 

California (Martin, 2013) concludes that such legalizations would greatly increase the proportion of 

the sector’s current workforce that is legally authorized to work in the United States. Such a change 

could benefit agricultural employers by reducing their risk of being fined for immigration law violations and/or seeing their labor supply disrupted by immigration enforcement activities.

Another proposal would replace the H-2A program with a new agricultural guestworker program. 

Under the proposed program, employers would register with USDA’s Farm Service Agency (FSA) 

to become “Designated Agricultural Employers.” This process would involve paying a fee, documenting engagement in agriculture, and estimating how many workers would be needed. Any agricultural employer would have access to the program for both year-round and seasonal labor needs. 

As with the H-2A Program, the employer would be required to advertise the job with the State 

workforce agency, and preference would be given to applicants who are U.S. citizens or permanent 

residents. Within 45 days of when workers are needed, the employer would be required to file a 

petition with the U.S. Department of Homeland Security (DHS) attesting how many workers are 

needed, when they are needed, specifics of their contracts, and evidence of the State workforce 

advertisement. DHS would be required to grant the request for guestworkers within 7 working days 

unless the petition was found to be incomplete or inaccurate.

Once the employee completes the initial job contract, she or he would become an “at-will” worker 

with permission to work for any designated agricultural employer. The employee would be allowed 

to stay in the United States for up to 3 years and would be eligible for a 3-year extension but would 

not be allowed to have more than a 2-month break in employment. The program’s at-will component 

would give workers the flexibility desired by labor advocates. At-will workers are the same as any 

authorized worker, except that they can only work in agriculture. They do not sign contracts unless 

they want to. If they feel they are treated poorly, they are free to move on to another employer. When 

the visa expires, workers must return home for at least 3 months before starting the process over, if 

they desire. Family members (spouse and children) of the employee are not allowed to accompany the 

worker during his or her term of employment. Employers pay transportation costs, and must provide 

either on-site housing or housing vouchers under certain conditions. For the first 4 years, the program 

would have an annual cap of 112,333 workers spread out evenly over four quarters. In later years, the 

Secretary of Agriculture would be responsible for establishing the annual cap.

Zahniser et al. (2012) use an economic simulation model to examine the effects of a 156,000-person 

increase in the employment of temporary nonimmigrant agricultural workers, such as those now 

participating in the H-2A Program. Findings from this study suggest that an expanded agricultural 

guestworker program would lead to longrun increases in U.S. agricultural output and exports. The 

increases in the modeling results are generally larger in labor-intensive sectors, such as fruit, tree 

nuts, vegetables, and nursery products. By year 15 of the simulation, these four sectors experience 

a 1.1- to 2.0-percent increase in output and a 1.7- to 3.2-percent increase in exports, relative to the 

model’s base forecast. Less labor-intensive sectors, such as grains, oilseeds, and livestock production, tend to have smaller increases, ranging from 0.1 to 1.5 percent for output and from 0.2 to 2.6 

percent for exports.
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Extending Free Trade to New Markets

In addition to working to deepen regional integration, the NAFTA countries are seeking more open 

trading relations with non-NAFTA countries as a means of cultivating new markets for their agricultural and nonagricultural products. Currently, all three NAFTA governments are negotiating 

additional FTAs with countries in other parts of the world—building upon their extensive network 

of FTAs with trade partners in Latin America, the Caribbean, Asia, Europe, Africa, and the Middle 

East. As of October 2014, the NAFTA countries had implemented a total of 30 FTAs with 53 countries outside the NAFTA region (table 8).

Table 8

The NAFTA countries already have multiple FTAs with the rest of the world

Central America and the Caribbean

Costa Rica El Salvador Guatemala Honduras Nicaragua

Dominican 

Republic Panama

U.S. 2009 2006 2006 2006 2006 2007 2012

Mexico 1995, 2013 2001, 2012 2001, 2013 2001, 2013 1998, 2012 -- Pending*

Canada 2002 -- -- Pending* -- -- 2013

South America

Colombia Bolivia Chile Uruguay Peru

U.S. 2012 -- 2005, TPP -- 2009, TPP

Mexico 1994, 2011, 

AP

1995, 2010 1999, AP, 

TPP

2004 2012, AP, 

TPP

Canada 2011 -- 1997, TPP -- 2009, TPP

Asia

Singapore Australia Japan South Korea Malaysia

New 

Zealand Vietnam

U.S. 2004, TPP 2005, TPP TPP 2012 TPP TPP TPP

Mexico TPP TPP 2005, TPP -- TPP TPP TPP

Canada TPP TPP TPP -- TPP TPP TPP

Europe, Africa, and Middle East

Israel

European Union

European 

Free Trade 

Association Jordan Bahrain Morocco Oman

Brunei 

Darussalam

U.S. 1985 TTIP -- 2001 2006 2006 2009 TPP

Mexico 2000 2000 2001 -- -- -- -- TPP

Canada 1997 Pending* 2009 2012 -- -- -- TPP

Notes: Years indicate when the relevant FTA was implemented. TPP = Trans-Pacific Partnership, TTIP = Transatlantic Trade and Investment 

Partnership, and AP = Alianza del Pacífico. European Free Trade Association encompasses Iceland, Liechtenstein, Norway, and Switzerland. 

European Union encompasses Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, 

Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxemburg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, 

Sweden, and United Kingdom.

*Mexico concluded negotiations of an FTA with Panama in February 2014; Canada reached an agreement-in-principle with the European 

Union (CETA) in October 2013 and signed an FTA with Honduras in November 2013. These agreements need to be approved by the legislative 

bodies of the participating countries before entering into force.

Source: Table presented in Zahniser and Herrera Moreno (2014), using data from Organization of American States (2014).
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The tariff preferences provided by these additional FTAs are generally similar to those that Canada, 

Mexico, and the United States extend to each other through NAFTA—including duty-free access for 

a wide range of agricultural products. Thus, these FTAs are a possible source of preference erosion 

with respect to agricultural trade among the NAFTA countries. A cursory look at agricultural import 

data, however, suggests that such preference erosion has not been a widespread challenge, as the 

NAFTA countries’ shares in each other’s total agricultural imports have changed little over the past 

decade (table 9).

Several ongoing trade negotiations involving the NAFTA countries are “super-regional”—meaning 

that they engage trade partners in more than one region of the world and would potentially cover 

a larger amount of economic activity than a traditional bilateral or regional trade agreement such 

as NAFTA. One super-regional initiative underway is the Trans-Pacific Partnership (TPP), which 

aspires to foster greater economic integration among 12 countries in the Pacific Rim: Australia, Brunei 

Darussalam, Chile, Japan, Malaysia, New Zealand, Peru, Singapore, Vietnam, and the 3 NAFTA 

partners. The TPP is important for many reasons, including its objective to establish comprehensive 

market access among the member countries and its involvement of major agricultural exporting and 

importing countries. Other super-regional initiatives involving the NAFTA countries include the 

agreement-in-principle for the Canada-EU Comprehensive Economic and Trade Agreement (CETA), 

the Transatlantic Trade and Investment Partnership (TTIP) negotiations between the United States 

and EU, and a trade agreement signed in August 2013 under the rubric of the Alianza del Pacífico, a 

regional integration initiative involving Mexico, Chile, Colombia, and Peru.

Mexico’s recent trade negotiations have provided it with the opportunity to consolidate several 

of its existing FTAs and broaden market access for agricultural and nonagricultural products. For 

example, the recent trade agreement forged by the Alianza del Pacífico consolidates the bilateral 

FTAs that Chile, Colombia, Mexico, and Peru had with each other while providing for a transition to duty-free trade in almost all agricultural products, with sugar and sugar-containing products being notable exceptions. Similarly, the Mexico-Central America Free Trade Agreement 

replaces Mexico’s bilateral FTAs with Costa Rica and with Nicaragua and its regional FTA with 

El Salvador, Guatemala, and Honduras. The new Mexico-Central America agreement features 

additional preferential market access for some sensitive items like sugar and dairy products as well 

as a consolidated set of rules of origin that applies to all member countries (México, Secretaría de 

Table 9

NAFTA countries’ shares of each other’s total agricultural imports have changed little over the past decade

Importer

Exporter

United States Canada Mexico

2001-03 2011-13 2001-03 2011-13 2001-03 2011-13

Percent

Total, NAFTA countries 37 36 63 63 81 80

United States -- -- 61 59 74 72

Canada 24 20 -- -- 7 8

Mexico 13 16 2 4 -- --

Total, non-NAFTA countries 63 64 37 37 19 20

NAFTA = North American Free Trade Agreement.

Note: For Canada and Mexico, agricultural imports are defined as Chapters 1-24 in the Harmonized System.

Sources: USDA, Economic Research Service, using USDA/FAS (2014a), and Mexico, Secretaría de Economía, and Statistics Canada, both as 

cited by Global Trade Information Service (2014).
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Economía, 2011c: 4-5). Although NAFTA includes a mechanism for the accession of new member 

countries, that mechanism has never been used.

The interest of the NAFTA countries in markets outside the NAFTA region reflects both the tremendous progress that has been made by removing trade barriers through NAFTA and other FTAs 

and the degree to which changes in the world’s demographics and economics have diminished the 

relative importance of the NAFTA region. According to the U.S. Census Bureau’s International 

Database, the world’s population is projected to grow from 7.2 billion to 8.6 billion over the next 

20 years (2014-34), with 94 percent of the total increase corresponding to non-NAFTA countries. 

Two continents are expected to account for a combined 89 percent of the projected increase: (1) 

Asia (excluding the Near East), due to the large size of its current population, and (2) Africa, due to 

its fast rate of projected population growth.39

In addition, several Asian countries are projected to have compound annual growth rates in real per 

capita income in excess of 5 percent over the next 15 years (2015-30), including Bhutan, Burma, 

Cambodia, China, India, Laos, Sri Lanka, and TPP partner Vietnam. Five percent is well above the 

average rates projected for the United States (1.87 percent), Canada (1.76 percent), and Mexico 

(3.13 percent) (USDA/ERS, 2014). For these reasons, agricultural producers in North America 

should be expected to increase their efforts to serve markets outside the NAFTA region. This trend 

is exemplified by the recent attention paid by pork and beef exporters in each NAFTA country to 

Asian markets and the efforts of each NAFTA country to negotiate additional trade agreements with 

non-NAFTA countries.

Still, the projections support expectations that the NAFTA region will also be a growing market. 

Among the NAFTA countries, the United States is expected to have the largest increase in population over the next two decades by virtue of the size of its current population and its projected rate 

of population growth relative to that of Canada and Mexico (fig. 13). Between 2014 and 2034, the 

region’s population is projected to increase by about 76 million—49 million in the United States, 

23 million in Mexico, and 4 million in Canada. This anticipated population growth heightens the 

attractiveness of the U.S. market, particularly to domestic producers and to Canadian and Mexican 

producers, who are proximate and enjoy duty-free access because of NAFTA.

39See U.S. Department of Commerce, Bureau of the Census (2013) for a list of the countries defined as part of the Near 

East.
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Figure 13

The total population of the NAFTA region is projected to increase by 76 million over the 

next 20 years

NAFTA = North American Free Trade Agreement.

Source: USDA, Economic Research Service, using data from U.S. Department of Commerce, Bureau of the Census 

(2013).

Millions of people

29 35 39

91

120

144

263

319

368

0

50

100

150

200

250

300

350

400

1994 2014 2034

Canada Mexico United States
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Conclusion

The 20th anniversary of NAFTA provides testimony to the lasting value of agricultural trade 

liberalization to the North American economy. By removing thousands of tariffs, quotas, import 

licensing requirements, and other policy measures that formerly distorted agricultural trade and FDI 

among the United States, Canada, and Mexico, NAFTA facilitated a large increase in cross-border 

economic activity in the agricultural and processed food sectors. While the patterns of specialization 

in intraregional agricultural trade reflect the resource endowments, climatological conditions, and 

accumulated skills and abilities of the three NAFTA countries, the active participation of producers, 

intermediaries, and consumers from each member country in the larger and far more integrated 

continental agricultural market fostered by NAFTA is a function of the agreement’s scope and 

comprehensiveness. To date, few other trade agreements have created a free-trade area that encompasses an economy as large as that formed by the United States, Canada, and Mexico and institutes 

tariff- and quota-free intraregional trade for virtually all agricultural products. The ongoing TPP 

and TTIP negotiations provide their respective participants with opportunities to establish new trade 

agreements that could surpass NAFTA in this regard.

With the passage of time, the specifics of NAFTA’s agricultural provisions are likely to fade from 

most people’s memories, even for those who study the agricultural sector closely. In the long run, 

NAFTA’s significance in the history of the North American economy is likely to be the closing of 

one chapter in which tariffs, quotas, and other barriers obstruct potential opportunities for intraregional trade and investment and the opening of another chapter in which the member countries 

work more closely together to develop such economic relationships and to seek similar relationships 

with other parts of the world. The first few pages of that new chapter tell of the implementation of 

NAFTA, and the rest of the chapter, of course, remains to be written.
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Appendix table 1

Selected U.S. agricultural exports to Canada, 1991-93 versus 2011-13—continued

Value Volume Unit Value

Average annual Average annual For period

1991-

93

2011-

13 Change

1991-

93

2011-

13 Change

1991-

93

2011-

13 Change

U.S. dollars 

(millions) Percent

Metric tons 

(thousands) Percent

U.S. dollars 

per kilogram Percent

Total 4,954 20,332 310 -- -- -- -- -- --

Animals and animal products 909 3,779 316 -- -- -- -- -- --

Beef and veal 363 1,100 203 87 168 94 4.19 6.53 56

Pork 29 787 2,589 9 204 2,075 3.14 3.86 23

Chickens, fresh or frozen 85 360 323 42 140 231 2.03 2.58 27

Poultry meats, prepared or preserved 54 182 240 12 44 256 4.33 4.13 -5

Sausage, other than chicken and 

turkey 23 161 596 5 34 561 4.56 4.79 5

Preparations for infant use, retail sale 4 117 2,590 1 25 2,254 4.05 4.72 17

Mink furskins, raw, whole5 17 108 549 1,633 2,478 52 10.14 43.38 328

Puddings ready for immediate 

consumption 4 86 2,103 3 55 1,995 1.49 1.57 5

Eggs 31 88 184 -- -- -- -- -- --

Whey, fluid or dried 10 83 721 -- -- -- -- -- --

Cheese 10 66 576 2 13 457 4.11 4.99 21

Milk albumin, including concentrates of 

two or more whey proteins -- 52 -- -- 5 -- -- 9.82 --

Cattle and calves1 36 33 -8 71 63 -12 506.51 528.46 4

Other 242 555 129 -- -- -- -- -- --

Grains and feeds 759 3,647 380 1,658 3,885 134 0.47 0.94 98

Dog or cat food, retail sale 146 568 290 142 274 93 1.04 2.08 100

Pastry, cake, bread, and pudding 101 473 367 62 163 164 1.65 2.91 76

Prepared food from swelling or roasting of cereal or cereal products 36 317 789 19 120 544 1.91 2.64 38

Mixes and doughs 31 234 650 27 127 367 1.15 1.83 59

Mixed feeds or mixed feed ingredients, 

excluding pet food 84 202 141 145 176 21 0.59 1.15 94

Stuffed, canned, and other prepared 

pasta 30 184 521 14 81 482 2.12 2.26 7

Other bread, pastry, cake, biscuits, 

and bakery wares, excluding pizza and 

quiche 8 176 1,975 5 52 1,057 1.88 3.37 79

Corn 60 171 187 600 671 12 0.10 0.26 153

Rice 56 164 193 142 227 60 0.39 0.72 83

Cookies, waffles, and wafers 48 161 233 25 62 150 1.64 2.58 57

Brewing or distilling dregs and waste 2 150 8,085 14 605 4,119 0.13 0.25 93

Corn chips and similar crisp snack 

foods 11 132 1,113 6 41 547 1.76 3.22 83

Continued—
75

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Appendix table 1

Selected U.S. agricultural exports to Canada, 1991-93 versus 2011-13—continued

Value Volume Unit Value

Average annual Average annual For period

1991-

93

2011-

13 Change

1991-

93

2011-

13 Change

1991-

93

2011-

13 Change

U.S. dollars 

(millions) Percent

Metric tons 

(thousands) Percent

U.S. dollars 

per kilogram Percent

Cereals (other than corn) or worked 

grains (except flour, groats, and meal), 

not bulgur wheat, not frozen -- 95 -- -- 54 -- -- 1.78 --

Pizza and quiche 11 86 659 3 24 604 3.28 3.53 8

Pasta, uncooked, not containing egg2 17 77 354 15 63 310 1.11 1.23 11

Wheat flour 3 58 1,912 10 106 928 0.27 0.55 99

Other 115 399 247 -- -- -- -- -- --

Fruits and preparations, excl. juice 711 2,192 208 872 1,272 46 0.82 1.72 110

Strawberries, fresh 51 322 534 36 115 221 1.41 2.80 98

Grapes, fresh 117 212 81 112 97 -14 1.05 2.19 110

Apples, fresh 58 191 230 76 134 76 0.76 1.42 87

Cherries, fresh 15 142 851 7 30 314 2.14 4.79 124

Oranges, fresh or dried 80 139 73 155 153 -1 0.55 0.91 65

Raspberries, blackberries, mulberries, 

and loganberries, fresh 4 136 3,104 7 21 183 0.58 6.57 1,031

Blueberries, fresh 10 114 1,068 8 32 302 1.25 3.62 191

Watermelons, fresh 25 83 227 78 151 94 0.37 0.55 48

Peaches, fresh 46 76 66 50 42 -15 0.93 1.81 95

Pears, fresh 26 54 112 37 45 24 0.70 1.20 70

Other 279 722 159 -- -- -- -- -- --

Fruit juices3 156 544 248 267 512 92 0.59 1.06 80

Orange juice3 83 289 249 155 347 124 0.54 0.83 55

Mixtures of fruit juices, unfermented, 

not fortified with vitamins or minerals 8 73 844 11 46 337 0.75 1.60 114

Other 66 181 175 -- -- -- -- -- --

Wine4 42 388 827 32 57 79 1.28 6.80 429

Nuts and preparations 129 708 448 72 206 186 1.78 3.43 93

Almonds, fresh or dried 30 186 520 9 32 256 3.37 5.83 73

Peanuts, shelled 38 89 136 43 70 63 0.89 1.27 43

Walnuts, fresh or dried 12 79 538 4 9 114 2.86 8.52 198

Popcorn, microwaveable -- 62 -- -- 31 -- -- 1.99 --

Pecans, fresh or dried 19 54 177 3 4 28 5.57 12.10 117

Other 30 238 705 -- -- -- -- -- --

Vegetables and preparations 918 2,737 198 -- -- -- -- -- --

Lettuce, fresh 109 423 286 254 297 17 0.43 1.42 230

Potatoes, fresh4 62 119 92 179 264 47 0.36 0.45 27

Potatoes, frozen 1 84 6,061 1 44 3,075 0.99 1.91 94

Continued—
76

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Appendix table 1

Selected U.S. agricultural exports to Canada, 1991-93 versus 2011-13—continued

Value Volume Unit Value

Average annual Average annual For period

1991-

93

2011-

13 Change

1991-

93

2011-

13 Change

1991-

93

2011-

13 Change

U.S. dollars 

(millions) Percent

Metric tons 

(thousands) Percent

U.S. dollars 

per kilogram Percent

Potato chips 24 74 206 10 17 75 2.48 4.35 75

Tomato sauces, other than ketchup 36 149 319 35 149 331 0.90 1.00 11

Other sauces and preparations 25 133 426 17 53 220 1.51 2.49 64

Tomatoes, fresh 114 123 8 137 89 -35 0.83 1.37 65

Carrots, fresh 26 114 348 71 99 39 0.36 1.16 222

Onions and shallots, fresh 42 106 149 103 153 48 0.41 0.69 68

Cauliflower, fresh 32 94 198 44 88 99 0.72 1.08 50

Spinach, fresh or chilled 9 85 809 12 28 131 0.76 3.00 294

Peppers, fresh 45 81 82 69 55 -20 0.68 1.48 120

Broccoli, fresh 41 76 84 72 65 -10 0.57 1.16 104

Celery, fresh 36 65 81 96 93 -3 0.37 0.70 87

Kohlrabi, fresh or chilled 5 57 1,113 7 39 491 0.70 1.45 105

Other 311 955 207 -- -- -- -- -- --

Oilseeds and products 322 1,577 390 961 2,027 111 0.33 0.78 133

Soybean meal 151 439 190 625 1,005 61 0.24 0.44 80

Soybeans 37 111 197 154 227 48 0.24 0.49 105

Soybean oil 8 43 459 15 30 103 0.53 1.46 177

Rapeseed 8 97 1,172 29 122 320 0.26 0.79 204

Rapeseed oil 2 133 7,697 3 119 4,572 0.74 1.12 52

Protein substances 16 119 638 6 17 178 2.58 6.89 167

Vegetable fats and oils and their fractions, hydrogenated, inter-esterified, 

reesterified, or elaidinized 6 85 1,354 5 52 934 1.16 1.62 39

Other animal or vegetable fats and oils, 

not elsewhere specified 6 66 1,069 4 29 572 1.32 2.30 74

Baking or frying fats, made from artificial mixtures of products in headings 

1501 to 1515, not containing 5 percent 

or more by weight of soybean oil or 

any fraction thereof 2 59 2,885 2 68 2,899 0.88 0.88 -0

Other 87 425 390 -- -- -- -- -- --

Cotton, excluding linters 61 2 -97 37 1 -98 1.62 2.47 52

Essential oils 48 345 611 4 26 557 11.48 13.15 15

Mixtures of odoriferous substances for 

use in food and beverage industry 33 309 826 3 23 737 12.28 13.66 11

Other 15 35 134 -- -- -- -- -- --

Continued—
77

NAFTA at 20: North America’s Free-Trade Area and Its Impact on Agriculture, WRS-15-01

Economic Research Service/USDA

Appendix table 1

Selected U.S. agricultural exports to Canada, 1991-93 versus 2011-13—continued

Value Volume Unit Value

Average annual Average annual For period

1991-

93

2011-

13 Change

1991-

93

2011-

13 Change

1991-

93

2011-

13 Change

U.S. dollars 

(millions) Percent

Metric tons 

(thousands) Percent

U.S. dollars 

per kilogram Percent

Seeds, field and garden 67 271 306 39 110 184 1.73 2.47 43

Corn seed, excluding sweet corn seed 10 124 1,140 8 26 221 1.25 4.82 286

Other 57 147 159 -- -- -- -- -- --

Sugar and tropical products 396 2,029 413 -- -- -- -- -- --

Coffee, roasted, not decaffeinated 44 580 1,206 9 70 700 5.14 8.31 62

Sugar confections and sweetmeats 

without cocoa 61 222 262 30 71 139 2.07 3.13 51

Cocoa preparations in bulk form 18 133 629 8 48 475 2.22 2.79 26

Food preparations containing cocoa 

other than confectionery, put up for 

retail sale 2 121 5,569 * 27 5,365 1.43 4.45 211

Tea, including herbal tea 22 108 389 4 19 337 5.20 5.64 9

Confectionery and food preparations 

containing cocoa, not elsewhere specified 51 94 84 17 19 14 2.38 4.86 104

Glucose or glucose syrup 24 97 299 63 189 202 0.39 0.51 31

Fructose syrup, containing more than 

50 percent by weight of fructose, not 

elsewhere specified 23 62 176 71 150 109 0.32 0.42 32

Chocolate and other food preparations containing cocoa, confectionery, 

in blocks, slabs, or bars weighing 2 

kilograms or less, filled 10 71 643 3 15 342 1.54 4.79 211

Confectionery containing synthetic 

sweetening agents instead of sugar 1 58 5,108 * 7 2,664 4.61 8.69 88

Spices 18 54 204 8 24 203 2.26 2.27 0

Other 121 429 255 -- -- -- -- -- --

Other horticultural products 173 1,183 586 -- -- -- -- -- --

Soups, broths, and other preparations, 

not based on fish or other seafood, not 

dried 5 94 1,714 3 42 1,207 1.64 2.23 36

Mixed condiments and mixed seasonings 13 79 486 4 24 479 2.65 3.30 24

Starches, excluding wheat and corn 

starch 22 73 235 36 72 100 0.63 1.02 62

Enzymes or prepared enzymes not 

elsewhere specified or indicated; excludes rennet and Penicillin G amidase -- 55 -- -- 6 -- -- 8.88 --

Other 132 881 568 -- -- -- -- -- --

Nursery and greenhouse products 110 203 86 -- -- -- -- -- --

Continued—
78

NAFTA at 20: North America’s Free-Trade Area and Its Impact on Agriculture, WRS-15-01

Economic Research Service/USDA

Appendix table 1

Selected U.S. agricultural exports to Canada, 1991-93 versus 2011-13—continued

Value Volume Unit Value

Average annual Average annual For period

1991-

93

2011-

13 Change

1991-

93

2011-

13 Change

1991-

93

2011-

13 Change

U.S. dollars 

(millions) Percent

Metric tons 

(thousands) Percent

U.S. dollars 

per kilogram Percent

Beverages excluding juices 109 703 542 -- -- -- -- -- --

Nonalcoholic beverages other than 

carbonated soft drinks, nonalcoholic 

beer, and cider 24 278 1,035 29 203 606 0.85 1.37 61

Preparations for the manufacture of 

beverages 44 183 319 8 17 114 5.34 10.52 97

Beer made from malt3 20 145 621 39 85 120 0.57 1.70 198

Carbonated soft drinks 9 79 755 16 108 581 0.62 0.73 17

Other 12 18 50 -- -- -- -- -- --

Other 45 25 -44 -- -- -- -- -- --

-- = not applicable.

1Volume is measured in thousands of head, and unit value is measured in dollars per head.

2Excludes canned pasta and stuffed pasta.

3Volume is measured in millions of liters, and unit value is measured in dollars per liter.

4Excludes seed potatoes.

5Volume is measured in thousands of pelts, and unit value is measured in dollars per pelt.

*Less than 500 metric tons.

Source: Prepared by USDA Economic Research Service, using data from U.S. Department of Commerce, Bureau of the Census, Foreign Trade 

Statistics, as presented by USDA/FAS (2014a).
79

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Appendix table 2

Selected U.S. agricultural imports from Canada, 1991-93 versus 2011-13—continued

Value Volume Unit Value

1991-

93

2011-

13 Change

1991-

93

2011-

13 Change

1991-

93

2011-

13 Change

U.S. dollars 

(millions) Percent

Metric tons 

(thousands) Percent

U.S. dollars 

per kilogram Percent

Total 4,044 20,298 402 -- -- -- -- -- --

Animals and animal products 1,784 4,463 150 -- -- -- -- -- --

Cattle and calves1 802 1,055 32 1,127 848 -25 706.63 1,243.62 76

Pork 368 950 158 177 289 63 2.08 3.29 58

Beef and veal 283 826 192 121 201 66 2.34 4.12 76

Beef variety meats 15 77 411 8 14 87 1.95 5.33 173

Swine1 82 341 315 854 5,470 541 65.47 62.34 -5

Confectionery (including gum) 

containing synthetic sweetening 

agents instead of sugar -- 133 -- -- 16 -- -- 8.39 --

Food preparations of flour, starch, 

and dairy, not elsewhere specified 2 121 6,221 2 41 2,134 1.05 2.97 183

Mink furskins2 22 118 435 1,071 1,916 79 20.57 61.38 198

Chicken, fresh or frozen 1 114 11,130 1 37 5,489 1.52 3.09 103

Chicken sausages and similar 

products -- 89 -- -- 20 -- -- 4.46 --

Bovine hides and skins, whole3 65 43 -34 1,620 667 -59 40.05 64.14 60

Other 143 598 317 -- -- -- -- -- --

Grains and feeds 759 4,990 557 -- -- -- -- -- --

Wheat, excluding seed 154 813 428 1,268 2,514 98 0.12 0.32 167

Bread, pastry, cakes, biscuits, and 

puddings 146 756 417 77 231 198 2.00 3.27 64

Sweet biscuits, waffles, and wafers, not frozen 17 454 2,508 8 108 1,196 2.19 4.22 92

Sweet biscuits, waffles, and wafers, frozen * 157 93,956 * 53 77,062 3.37 2.95 -12

Oats, unmilled 54 379 604 576 1,501 161 0.10 0.25 157

Grains, rollled or flaked, of oats 1 73 5,914 4 108 2,603 0.30 0.68 126

Groats and meal of oats 3 70 2,437 11 143 1,229 0.26 0.49 89

Mixes and doughs 14 270 1,812 12 138 1,041 1.22 1.95 60

Corn, unmilled 27 234 753 284 838 195 0.10 0.28 188

Dog or cat food, retail sale 46 206 347 67 84 27 0.69 2.45 254

Prepared food from swelling or 

roasting cereal flakes or products 48 205 331 27 81 198 1.76 2.54 44

Malt, not roasted 3 178 5,854 13 278 2,082 0.24 0.64 171

Mixed feeds or mixed feed ingredients, excluding bird feed and pet 

food 44 121 177 166 155 -6 0.26 0.78 198

Pasta and noodles4 12 116 849 12 45 259 0.99 2.61 163

Barley, unmilled 46 109 137 474 354 -25 0.10 0.31 212

Continued—
80

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Appendix table 2

Selected U.S. agricultural imports from Canada, 1991-93 versus 2011-13—continued

Value Volume Unit Value

1991-

93

2011-

13 Change

1991-

93

2011-

13 Change

1991-

93

2011-

13 Change

U.S. dollars 

(millions) Percent

Metric tons 

(thousands) Percent

U.S. dollars 

per kilogram Percent

Cereals other than corn, grain 

form, precooked or otherwise 

prepared, not frozen * 104 21,057 * 38 11,998 1.39 2.71 95

Wheat or meslin flour 13 84 560 46 120 162 0.11 0.70 532

Brewing or distilling dregs and 

waste 7 82 990 58 378 550 0.13 0.22 67

Stuffed, canned, or other prepared 

pasta 7 53 718 6 12 109 1.27 4.58 261

Other 116 524 351 -- -- -- -- -- --

Fruits and preparations, excluding 

juice 71 533 652 100 224 125 0.72 2.38 229

Blueberries, frozen 10 124 1,203 6 36 555 1.72 3.41 99

Blueberries, fresh 10 93 813 9 26 202 1.17 3.56 204

Cranberries, fresh 12 65 464 17 51 203 0.70 1.29 85

Other 40 251 534 -- -- -- -- -- --

Fruit juices4 10 73 644 16 76 375 0.62 0.96 57

Nuts 14 72 399 10 19 99 1.49 3.73 150

Vegetables and preparations 195 2,292 1,073 -- -- -- -- -- --

Potatoes, frozen 54 717 1,238 99 741 650 0.54 0.97 79

Potatoes, fresh5 33 150 357 189 412 118 0.17 0.37 117

Tomatoes, fresh 5 296 5,317 4 140 3,235 1.36 2.11 55

Peppers, fresh 5 229 4,267 3 96 3,624 2.10 2.39 14

Cucumbers, fresh 3 137 3,893 4 91 2,364 0.94 1.51 61

Mushrooms, fresh or chilled 3 105 3,548 2 30 1,642 1.68 3.47 107

Sauces and preparations, not 

elsewhere specified -- 89 -- -- 29 -- -- 3.06 --

Other 92 568 519 -- -- -- -- -- --

Sugar and related products 193 801 316 -- -- -- -- -- --

Confectionery products, except 

chewing gum 29 403 1,267 18 136 649 1.64 2.97 81

Maple syrup 28 159 460 12 23 98 2.49 6.99 181

Glucose and glucose syrup 15 67 339 69 169 146 0.22 0.40 79

Chewing gum 30 61 103 17 25 53 1.80 2.41 34

Other 89 111 24 -- -- -- -- -- --

Cocoa and cocoa products 148 992 572 78 284 263 1.89 3.49 84

Chocolate or cocoa preparations 

in blocks, slabs, or bars of 2 kilograms or more, or in liquid, paste, 

powder, granular, or other bulk 

form in containers or immediate 

packaging of a content exceeding 

2 kilograms 56 394 605 37 165 339 1.49 2.40 60

Continued—
81

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Appendix table 2

Selected U.S. agricultural imports from Canada, 1991-93 versus 2011-13—continued

Value Volume Unit Value

1991-

93

2011-

13 Change

1991-

93

2011-

13 Change

1991-

93

2011-

13 Change

U.S. dollars 

(millions) Percent

Metric tons 

(thousands) Percent

U.S. dollars 

per kilogram Percent

Chocolate or cocoa preparations, 

in bars, blocks, or slabs not over 2 

kilograms, filled 28 131 371 11 22 96 2.45 5.90 141

Chocolate or cocoa preparations, 

in bars, blocks, or slabs not over 2 

kilograms, not filled 4 111 2,728 1 17 1,411 3.53 6.60 87

Chocolate or cocoa preparations, 

not elsewhere specified 52 322 518 23 71 205 2.23 4.51 103

Other 8 33 327 -- -- -- -- -- --

Coffee and coffee products 33 405 1,126 6 38 567 5.79 10.58 83

Coffee, roasted, not decaffeinated, 

in retail containers weighing 2 

kilograms or less 3 290 8,305 1 26 3,519 4.84 11.27 133

Coffee, roasted, not decaffeinated, 

other 1 60 10,914 * 7 5,573 4.64 9.01 94

Other 29 55 90 -- -- -- -- -- --

Tea and mate, including herbal tea 24 107 357 37 58 57 0.67 1.85 177

Preparations of tea or mate 

containing over 10 percent by dry 

weight of sugar

-- 72 -- -- 56 -- -- 1.29 --

Other -- 36 -- -- -- -- -- --

Spices and herbs 21 74 254 60 79 31 0.35 0.93 170

Mustard seeds 15 52 239 55 65 18 0.28 0.80 187

Other 5 22 295 -- -- -- -- --

Tobacco, unmanufactured 27 88 226 9 19 110 3.01 4.68 55

Beverages, excluding fruit juices 196 374 92 -- -- -- -- -- --

Beer made from malt6 148 185 25 262 252 -4 0.57 0.73 30

Preparations for beverages 5 74 1,354 4 44 959 1.24 1.70 37

Other 43 115 169 -- -- -- -- -- --

Oilseeds and products 318 3,706 1,066 1,221 5,705 367 0.26 0.65 151

Rapeseed oil 151 1,775 1,079 297 1,403 372 0.50 1.27 151

Rape or colza seed oilcake 67 866 1,195 520 2,782 435 0.21 0.31 51

Rapeseed 13 291 2,167 55 553 908 0.25 0.53 107

Soybeans 21 220 968 96 410 329 0.22 0.54 149

Soybean oil 1 91 9,662 2 73 3,808 0.50 1.24 150

Flaxseed 24 120 399 130 177 36 0.19 0.68 261

Other 42 342 718 -- -- -- -- -- --

Seeds, field and garden 50 270 442 73 206 182 0.68 1.31 92

Corn seed 9 77 775 7 19 158 1.22 4.12 239

Other 41 192 370 -- -- -- -- -- --

Nursery stock, bulbs, etc. 85 245 189 -- -- -- -- -- --

Continued—
82

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Appendix table 2

Selected U.S. agricultural imports from Canada, 1991-93 versus 2011-13—continued

Value Volume Unit Value

1991-

93

2011-

13 Change

1991-

93

2011-

13 Change

1991-

93

2011-

13 Change

U.S. dollars 

(millions) Percent

Metric tons 

(thousands) Percent

U.S. dollars 

per kilogram Percent

Other horticultural products 82 673 724 -- -- -- -- -- --

Soups, broths, and preparations, 

not dried, not based on fish or 

seafood 5 118 2,294 4 99 2,666 1.68 1.19 -29

Yeasts 16 81 425 18 53 185 0.84 1.55 84

Other 61 474 674 -- -- -- -- -- --

Other 37 139 280 -- -- -- -- -- --

*Less than $500,000 in value and 500 kilograms in volume.

1Volume is measured in thousands of head, and unit value is measured in dollars per head.

2Volume is measured in thousands of furskins, and unit value is measured in dollars per furskin.

3Volume is measured in thousands of pieces, and unit value is measured in dollars per piece.

4Excludes stuffed pasta and canned pasta.

5Excludes seed potatoes.

6Volume is measured in millions of liters, and unit value is measured in dollars per liter.

Source: Prepared by USDA Economic Research Service, using data from U.S. Department of Commerce, Bureau of the Census, Foreign Trade 

Statistics, as presented by USDA/FAS (2014a).
83

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Appendix table 3

Selected U.S. agricultural exports to Mexico, 1991-93 versus 2011-13—continued

Value Volume Unit Value

Average annual Average annual For period

1991-

93

2011-

13 Change

1991-

93

2011-

13 Change

1991-

93 2011-13 Change

U.S. dollars 

(millions) Percent

Metric tons 

(thousands) Percent

U.S. dollars 

per kilogram Percent

Total 3,475 18,455 431 -- -- -- -- -- --

Animals and animal products 1,183 5,306 348 -- -- -- -- -- --

Pork 68 891 1,210 32 426 1,232 2.15 2.09 -3

Pork variety meats 46 198 331 62 147 138 0.73 1.34 83

Beef and veal 171 692 305 58 133 129 2.97 5.21 76

Beef variety meats 48 219 356 41 89 118 1.18 2.45 108

Nonfat dry milk 55 635 1,055 33 188 470 1.64 3.38 106

Chickens, fresh or frozen 68 583 758 74 550 644 0.92 1.06 15

Tallow, inedible 41 292 613 113 275 143 0.36 1.06 192

Turkeys, fresh or frozen 66 337 411 46 172 274 1.42 1.96 38

Cheese 14 275 1,801 5 65 1,097 2.62 4.21 61

Whey, fluid or dried 12 133 1,001 -- -- -- -- -- --

Tallow, edible 33 68 110 89 64 -28 0.37 1.07 192

Bovine hides, whole1 110 66 -40 2,415 1,244 -48 45.43 52.75 16

Live horses2 2 61 3,512 2 129 6,578 876.00 473.74 -46

Cattle and calves2 115 26 -77 179 17 -90 680.57 1,522.64 124

Other 334 828 148 -- -- -- -- -- --

Grains and feeds 897 5,406 503 6,507 16,307 151 0.14 0.33 141

Corn 104 2,314 2,126 913 7,870 762 0.12 0.29 153

Brewing or distilling dregs and waste 2 414 23,451 15 1,521 10,113 0.11 0.27 143

Cracked corn 13 56 344 69 155 125 0.22 0.36 68

Wheat, unmilled 78 1,016 1,202 563 3,238 475 0.14 0.31 127

Sorghum 428 427 0 3,949 1,535 -61 0.11 0.28 158

Rice 42 375 793 175 874 400 0.25 0.43 74

Malt, not roasted 13 130 923 59 226 286 0.28 0.57 104

Other bread, pastry, cake, biscuits, 

and bakery, wares, excluding pizza 

and quiche 18 96 439 13 17 29 1.32 5.52 317

Preparations used in animal feeding, 37 78 109 179 61 -66 0.21 1.27 512

 except pet food and bird seed

Mixes and doughs -- 72 -- -- 48 -- -- 1.50 --

Other 162 429 164 -- -- -- -- -- --

Fruits and preparations, excluding 

juice 81 645 694 143 527 269 0.57 1.22 114

Apples, fresh 34 272 700 68 237 249 0.52 1.15 122

Pears, fresh 17 81 382 33 80 142 0.51 1.01 99

Grapes, fresh 5 77 1,509 5.13 48 842 0.93 1.59 71

Continued—
84

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Appendix table 3

Selected U.S. agricultural exports to Mexico, 1991-93 versus 2011-13—continued

Value Volume Unit Value

Average annual Average annual For period

1991-

93

2011-

13 Change

1991-

93

2011-

13 Change

1991-

93 2011-13 Change

U.S. dollars 

(millions) Percent

Metric tons 

(thousands) Percent

U.S. dollars 

per kilogram Percent

Other 26 216 738 -- -- -- -- -- --

Nuts and preparations 33 246 636 22 70 216 1.51 3.53 133

Pecans 13 63 393 6 10 62 2 6.18 204

Other 21 183 786 -- -- -- -- -- --

Vegetables and preparations 96 603 530 -- -- -- -- -- --

Dry common beans 15 112 634 26 133 408 0.58 0.84 44

Potatoes, frozen 7 91 1,284 10 91 829 0.69 1.00 44

Sauces and preparations, not 

elsewhere specified 5 55 1,005 2 29 1,120 2.13 1.93 -9

Other 69 345 401 -- -- -- -- -- --

Oilseeds and products 633 3,091 389 2,489 5,286 112 0.25 0.58 130

Soybeans 400 1,686 321 718 3,066 327 0.23 0.55 136

Soybean meal 68 634 832 313 1,345 330 0.23 0.47 107

Soybean oil 13 205 1,474 27 169 525 0.47 1.21 156

Animal or vegetable fats and oils and 

their fractions, not elsewhere specified 3 75 2,152 27 87 223 0.47 0.86 81

Other 148 492 232 -- -- -- -- -- --

Tobacco, unmanufactured * 90 42,477 * 16 30,085 3.75 5.56 48

Cotton, excluding linters 118 532 350 87 221 154 1.42 2.41 69

Essential oils 21 106 395 2 8 292 10.46 13.40 28

Mixtures of odoriferous substances 

for use in food and beverage industry 2 74 2,998 * 5 1,831 8.46 13.56 60

Other 19 33 71 -- -- -- -- -- --

Seeds, field and garden 108 245 127 181 117 -35 0.76 2.10 176

Sugar and tropical products 154 1,255 717 -- -- -- -- -- --

Fructose syrup, containing more than 

50 percent by weight of fructose, 

NESOI 5 445 8,627 17 1,136 6,781 0.31 0.39 24

Chocolate and preparations 47 230 390 16 63 294 2.92 3.62 24

Glucose or glucose syrup 5 187 3,388 18 424 2,237 0.37 0.44 19

Sugar, cane or beet 44 120 170 116 148 28 0.36 0.81 126

Other 52 274 428 -- -- -- -- -- --

Other horticulutural products 60 631 954 -- -- -- -- -- --

Soups, broths, and preparations 

thereof, dried 18 176 868 9 66 592 1.91 2.69 41

Other 42 454 991 -- -- -- -- -- --

Nursery and greenhouse products 15 55 268 -- -- -- -- -- --

Continued—
85

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Appendix table 3

Selected U.S. agricultural exports to Mexico, 1991-93 versus 2011-13—continued

Value Volume Unit Value

Average annual Average annual For period

1991-

93

2011-

13 Change

1991-

93

2011-

13 Change

1991-

93 2011-13 Change

U.S. dollars 

(millions) Percent

Metric tons 

(thousands) Percent

U.S. dollars 

per kilogram Percent

Beverages, excluding juices 51 193 277 -- -- -- -- -- --

Beer from malt3 12 108 765 22 132 490 0.55 0.81 48

Other 39 86 120 -- -- -- -- -- --

Other 25 51 100 -- -- -- -- -- --

Unit value is calculated as the average of the annual unit values for the 3 years in the period specified.

*Less than $500,000 in average value and less than 500 metric tons in average volume.

1Volume is measured in thousands of pieces, and unit value is measured in dollars per piece.

2Volume is measured in thousands of head, and unit value is measured in dollars per head.

3Volume is measured in millions of liters, and unit value is measured in dollars per liter.

Source: USDA, Economic Research Service, using U.S. Department of Commerce, Census Bureau, Foreign Trade Statistics, as cited by 

USDA/FAS (2014a).
86

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Appendix table 4

Selected U.S. agricultural imports to Mexico, 1991-93 versus 2011-13—continued

Value Volume Unit Value

Average annual Average annual For period

1991-

93

2011-

13 Change

1991-

93

2011-

13 Change

1991-

93 2011-13 Change

U.S. dollars 

(millions) Percent

Metric tons 

(thousands) Percent

U.S. dollars 

per kilogram Percent

Total 2,542 16,635 554 -- -- -- -- -- --

Animals and animal products 408 1,370 236 -- -- -- -- -- --

Cattle and calves1 377 614 63 1,104 1,293 17 342.67 474.79 39

Beef and veal 2 460 22,876 1 81 12,274 3.51 5.71 63

Milk and cream, fresh or dried -- 55 -- -- -- -- -- -- --

Parings and similar waste of raw 

hides or skins, or glue stock not 

elsewhere specified or included 1 51 6,155 * 11 3,470 2.65 4.65 75

Other 28 189 572 -- -- -- -- -- --

Grains and feeds 51 949 1,756

Biscuits and wafers2 16 485 2,961 11 212 1,857 1.46 2.28 57

Prepared foods obtained from 

swelling or roasting of cereal 

flakes or products, with or without 

sugar 4 145 3,895 2 44 1,673 1.47 3.33 127

Corn chips and savory snacks 11 93 746 7 35 413 1.63 2.67 64

Pastry, not elsewhere specified or 

indicated 13 74 491 8 30 259 1.52 2.51 65

Pasta and noodles 5 52 992 6 57 840 0.78 0.91 16

Other 3 100 2,834 -- -- -- -- -- --

Fruits and preparations 322 3,322 932 586 2,825 382 0.45 1.18 159

Avocados, fresh or dried 1 841 82,902 1 420 74,886 1.85 2.00 9

Avocados, processed 12 137 1,015 6 51 788 2.16 2.71 26

Strawberries, fresh 15 300 1,902 12 140 1,063 1.28 2.15 69

Strawberries, frozen 18 111 505 23 77 237 0.80 1.43 80

Grapes, fresh 59 326 452 40 136 241 1.47 2.39 63

Watermelons, fresh 18 226 1,157 89 459 415 0.20 0.49 149

Limes, fresh or dried 20 198 875 87 401 364 0.23 0.49 110

Mangoes, fresh3 63 194 208 80 253 216 0.79 0.77 -2

Raspberries, fresh * 193 1,232,447 * 25 471,622 2.93 7.58 159

Blackberries, mulberries, and 

loganberries, fresh * 174 317,529 * 51 127,018 1.45 3.41 135

Bananas, fresh 84 89 6 307 209 -32 0.27 0.42 55

Grapefruit, prepared or preserved 3 63 2,108 3 36 1,266 1.10 1.77 62

Papayas, fresh 4 57 1,325 7 107 1,338 0.53 0.54 2

Other 24 412 1,583 -- -- -- -- -- --

Continued—
87

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Appendix table 4

Selected U.S. agricultural imports to Mexico, 1991-93 versus 2011-13—continued

Value Volume Unit Value

Average annual Average annual For period

1991-

93

2011-

13 Change

1991-

93

2011-

13 Change

1991-

93 2011-13 Change

U.S. dollars 

(millions) Percent

Metric tons 

(thousands) Percent

U.S. dollars 

per kilogram Percent

Fruit juices4 40 216 443 147 484 228 0.29 0.45 53

Orange juice4 22 150 577 97 367 279 0.23 0.41 74

Other 18 67 276 -- -- -- -- -- --

Nuts and preparations 55 324 487 17 76 335 3.35 4.26 27

Pecans 53 269 403 14 45 222 4.02 5.91 47

Other 2 55 2,954 -- -- -- -- -- --

Vegetables and preparations 923 5,049 447 -- -- -- -- -- --

Tomatoes, fresh 229 1,674 631 312 1,363 337 0.73 1.23 68

Peppers, fresh 120 755 530 124 726 485 0.97 1.04 8

Cucumbers, fresh 73 345 373 179 527 195 0.41 0.65 60

Squash, fresh 60 259 332 83 285 244 0.72 0.91 26

Asparagus, fresh 29 257 785 21 96 357 1.39 2.67 92

Onions, fresh 92 226 146 178 258 45 0.52 0.88 68

Broccoli, frozen 89 220 146 133 198 49 0.67 1.11 65

Lettuce, fresh 4 146 3,882 8 141 1,564 0.44 1.03 135

Cauliflower and broccoli, fresh 4 133 3,446 13 149 1,025 0.28 0.89 219

Sauces and preparations, not 

elsewhere specified -- 81 -- -- 56 -- -- 1.45 --

Potato granules -- 65 -- -- 17 -- -- 3.86 --

Fresh beans, other than vigna, 

lima, or lentils 12 55 365 10 42 307 1.13 1.29 14

Eggplant, fresh 12 50 303 18 49 172 0.69 1.02 48

Other 199 782 293 -- -- -- -- -- --

Sugar and related products 35 1,596 4,399 -- -- -- -- -- --

Sugar, cane or beet 1 1,057 89,104 3 1,514 57,404 0.82 0.70 -15

Confectionery products 23 445 1,869 15 209 1,332 1.54 2.13 38

Other 12 94 701 -- -- -- -- -- --

Cocoa and cocoa products 20 516 2,503 14 215 1,480 1.69 2.40 42

Coffee and coffee products 279 554 99 182 111 -39 1.53 4.99 225

Coffee, arabica, not roasted, not 

decaffeinated 25 325 1,194 17 74 332 1.48 4.42 199

Instant coffee, not flavored, not 

decaffeinated, packaged for retail 

sale 1 94 13,871 * 11 4,648 4.85 8.63 78

Coffee, arabica, not roasted, 

decaffeinated 30 55 83 10 12 4,648 3.00 4.67 56

Other 223 79 -64 -- -- -- -- -- --

Continued—
88

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Appendix table 4

Selected U.S. agricultural imports to Mexico, 1991-93 versus 2011-13—continued

Value Volume Unit Value

Average annual Average annual For period

1991-

93

2011-

13 Change

1991-

93

2011-

13 Change

1991-

93 2011-13 Change

U.S. dollars 

(millions) Percent

Metric tons 

(thousands) Percent

U.S. dollars 

per kilogram Percent

Spices and herbs 41 72 76 28 43 54 1.45 1.65 14

Drugs, crude natural 2 59 2,934 4 21 470 0.52 2.76 432

Essential oils 8 51 500 -- -- -- -- -- --

Beverages, excluding fruit juices 170 2,118 1,146 -- -- -- -- -- --

Beer4 145 1,804 1,144 179 1,770 889 0.82 1.02 24

Carbonated soft drinks4 15 204 1,261 19 298 1,468 0.80 0.69 -15

Other nonalcoholic beverages4 6 73 1,095 8 96 1,090 0.75 0.76 0

Other 4 37 837 -- -- -- -- -- --

Oilseeds and oilseed products 38 146 285 32 78 148 1.14 1.86 63

Other horticultural products 52 173 229 -- -- -- -- -- --

Yeasts 10 70 584 7 25 270 1.52 2.82 85

Other 42 103 143 -- -- -- -- -- --

Other 97 122 25 -- -- -- -- -- --

* = Imports average less than $500,000 in value and/or less than 500 metric tons in volume.

1Volume is measured in thousands of head, and unit value is measured in dollars per head.

2Includes sweet biscuits, waffles, wafers, pastries, cake, and bread, among other products.

3Data for 1991-92 also include guavas and mangosteens.

4Volume is measured in millions of liters, and unit value is measured in dollars per liter.

Source: USDA, Economic Research Service, using U.S. Department of Commerce, Census Bureau, Foreign Trade Statistics, as cited by 

USDA/FAS (2014a).
89

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Appendix table 5

U.S., Canadian, and Mexican foreign direct investment position in the NAFTA region’s food industry on a 

historical-cost basis

Food and kindred products

Origin/destination 1994 1995 1996 1997 1998

U.S. million dollars

U.S. direct investment in Canada 4,021 4,498 4,265 4,649 4,985

U.S. direct investment in Mexico 2,660 2,929 3,579 4,484 4,723

Canadian direct investment in the U.S. 5,877 7,199 7,764 10,087 6,684

Mexican direct investment in the U.S. (S) (S) (S) 306 1,092

Food industry

Origin/destination 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

U.S. direct investment in Canada 3,693 3,431 3,421 4,153 3,964 2,821 2,718 2,998 4,393 4,458 5,090 6,079 7,655 8,599 10,143

U.S. direct investment in Mexico 1,281 1,427 1,250 2,159 2,134 2,203 2,790 2,610 2,835 2,497 2,971 3,271 3,728 3,894 3,983

Canadian direct 

investment in 

the U.S. 1,088 1,405 984 983 922 1,175 2,109 1,235 1,200 995 945 1,220 1,655 1,957 1,846

Mexican direct 

investment in 

the U.S. 1,060 1,058 1,102 (S) (S) (S) (S) (S) (S) 1,303 (S) (S) 1,947 2,034 2,187

Note: Kindred products refers primarily to beverages. NAFTA = North American Free Trade Agreement.

(S) = Suppressed in order to avoid disclosure of data of individual companies

Source: USDA, Economic Research Service, using U.S. Department of Commerce, Bureau of Economic Analysis (2014a).