United States 

Department 

of Agriculture 

www.ers.usda.gov 

 A Report from the Economic Research Service

Abstract

The North American Free Trade Agreement (NAFTA) is an integral part of the North 

American economy. Regional agricultural trade is now completely free of tariff and 

quota restrictions, with a few exceptions such as those related to Canadian supply 

management. During the course of NAFTA’s implementation, the agricultural sectors 

of the member countries have become far more integrated, as is evidenced by increased 

trade in a wider range of agricultural products, substantial levels of cross-border investment, and important changes in consumption and production. Efforts to seek deeper 

regional integration will necessarily focus on increasing the fl uidity of cross-border 

economic activity within the existing framework of NAFTA’s free-trade area.

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

Agreement, CUSTA, Canada, Mexico, United States, trade, investment, trucking.

Acknowledgments

We acknowledge the critical feedback and useful suggestions of Andrew Estrin, 

Denise Beavers, and Bradley Brown of the U.S. Food and Drug Administration; 

Robert Keeney, Enrique Ospina, Delmy Salin, and Brian McGregor of USDA, 

Agricultural Marketing Service; Nicholas Gutierrez of USDA, Animal and Plant 

Health Inspection Service; J.P. Passino, Alicia Isom, Tim Rocke, Tony Halstead, 

Hui Jiang, Elizabeth Autry, Elle O’Flaherty, and Erin Hubbard of USDA, Foreign 

Agricultural Service (Washington); Allan Mustard, Daniel Williams, Carlos Gonzalez, 

and Adam Branson of USDA, Foreign Agricultural Service (Mexico City); Robin 

Steven Zahniser, zahniser@ers.usda.gov

Andrew Roe*

NAFTA at 17

Full Implementation Leads To 

Increased Trade and Integration

WRS-11-01

March 2011

Contents

Approved by USDA’s 

World Agricultural 

Outlook Board

Introduction. . . . . . . . . . . . . . . . . . .3

What Is NAFTA? . . . . . . . . . . . . . .5

Overview of North American 

 Market Integration . . . . . . . . . .7

Economic Recovery Buoys 

 NAFTA Agricultural Trade . . 13

NAFTA Trucking Issue Intersects 

 With U.S. Agricultural 

 Exports . . . . . . . . . . . . . . . . . . .15

Country-of-Origin Labeling and 

 Livestock and Meat Trade . . .22

A North American Market for 

 Grains, Oilseeds, and Related 

 Products . . . . . . . . . . . . . . . . . .23

Livestock and Animal Product 

 Markets Experience Further 

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

A Highly Integrated Fruit 

 and Vegetable Market . . . . . .32

Integration of U.S.-Mexico Sugar 

 and Sweetener Markets 

 Reaches High Level . . . . . . . .38

Multilateral Trade Liberalization 

 Reshapes the Cotton, Textile, 

 and Apparel Markets . . . . . . .40

What Does North America’s 

 Future Hold? . . . . . . . . . . . . . . 41

References . . . . . . . . . . . . . . . . . . .46

Appendix tables. . . . . . . . . . . . . . .59

*Andrew Roe contributed to this report as an intern at USDA’s Economic Research Service during 

summer 2010.
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Tilsworth, Mihai Lupescu, Robin Gray, and Darlene Dessureault of USDA, 

Foreign Agricultural Service (Ottawa); Carol Goodloe and Peter Feather of 

USDA, Offi ce of the Chief Economist; John Melle, Tanya Menchi, and Kent 

Shigetomi of the Offi ce of the United States Trade Representative; and Linda 

Calvin, John Dyck, Stephen Haley, Linwood Hoffman, Gary Lucier, Stephen 

MacDonald, Kenneth Mathews, Mary Anne Normile, and Mathew Shane of 

USDA, Economic Research Service. Special thanks also go to John Weber 

and Wynnice Pointer-Napper for their expert editing and design of the report.

Foreword

This is the seventh and fi nal report on NAFTA’s effects on U.S. agriculture 

and the rural economy to be submitted to the U.S. Congress in accordance 

with the North American Free Trade Agreement Implementation Act of 1993. 

The legislation requires that the Secretary of Agriculture submit a biennial 

report on this subject, starting in 1997 and ending in 2011. This edition covers 

economic and policy developments through 2010 and early 2011.
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The North American Free Trade Agreement (NAFTA) is now an integral part 

of the North American economy. Roughly 3 years have passed since January 

1, 2008, when the last transitional agricultural trade restrictions established 

by NAFTA were removed. That date marked the end of a 14-year process 

(1994-2007) in which NAFTA’s member countries—Canada, Mexico, and 

the United States—gradually removed thousands of barriers to regional 

agricultural trade. Canada and the United States started to pursue agricultural trade liberalization in 1989 as part of the Canada-U.S. Free Trade 

Agreement (CUSTA), which was then folded into NAFTA, and Mexico 

implemented a number of unilateral agricultural trade reforms in the early 

1990s (Rosenzweig Pichardo, 2000; Zahniser et al., 2004). Mexico and the 

United States have fully eliminated all tariffs and quantitative restrictions 

on agricultural goods, which to date is unique among U.S. trade agreements. 

When all of these initiatives are considered together, the NAFTA countries 

have completed a remarkable two decades of agricultural trade liberalization.

The third decade of free trade in North America has thus far been marked 

by challenges. First, the recent economic downturn affected each NAFTA 

country. All three countries experienced a contraction of per capita income 

in 2009, and after 2 years of modest economic growth, per capita incomes 

are expected to exceed their respective 2008 levels in 2011 (fi g. 1). In 2010, 

regional agricultural trade showed signs of recovering from the slowdown, 

and this upturn is expected to continue during 2011 (USDA/ERS and USDA/

FAS, 2010). Second, the Mexican Government imposed retaliatory import 

tariffs in March 2009 (and expanded their coverage in August 2010) on a 

number of agricultural and nonagricultural products from the United States 

in response to U.S. noncompliance with NAFTA’s trucking provisions. 

These newly erected trade barriers have hindered some U.S. agricultural 

exports to Mexico, illustrating the importance of NAFTA’s provisions to 

U.S. agricultural exporters and Mexican consumers. In March 2011, the U.S. 

Introduction

Figure 1

Per capita income in the NAFTA countries is expected to exceed its 

2008 level in 2011

Purchasing-power-parity per capita GDP (current international 1,000 dollars)

2010 and 2011 are estimated. An international dollar is a hypothetical currency that is used 

as a means of comparing costs across countries using the U.S. dollar as a reference point. 

Source: USDA, Economic Research Service using data from International Monetary 

Fund (2010). 

2002 03 04 05 06 07 08 09 10 11

0

10

20

30

40

50

60

United States Canada Mexico
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and Mexican Governments unveiled an agreement in principle that holds 

the promise of resolving this dispute. Third, the Canadian and Mexican 

Governments are using the dispute settlement process at the World Trade 

Organization (WTO) to challenge U.S. requirements for country-of-origin 

labeling (COOL) as they pertain to live cattle and live hogs. Beef and pork 

are among the commodities covered by the requirements, and the United 

States imports live cattle from Canada and Mexico and live hogs from 

Canada in order to produce some of its beef and pork.

Despite these recent challenges, the integration of North America’s agricultural markets as fostered by CUSTA and NAFTA will continue to be an 

enduring facet of economic life in the United States, Canada, and Mexico 

for the simple reason that market integration offers many tangible benefi ts. 

In general, it enables agricultural producers and consumers in the region to 

benefi t more fully from their relative strengths and to respond more effi ciently 

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, market integration gives producers access to potentially cheaper 

suppliers of inputs and creates new opportunities for foreign direct investment (FDI), as fi rms restructure their vertical and horizontal arrangements. 

For consumers, market integration gives them access to new varieties of food 

products and off-season supplies of fresh produce. Greater competition along 

the food supply chain is also likely to make food more affordable, thereby 

expanding consumer purchasing power.

In this edition of the NAFTA report, ERS examines the extent to which 

market integration has taken hold in North American agriculture, the effects 

of economic and policy challenges of the past several years on U.S. agricultural trade with Canada and Mexico, and efforts to facilitate the further integration of the region’s agricultural sector. This report’s assessment of market 

integration relies upon the framework fi rst presented in the 2005 NAFTA 

report, and readers are invited to compare fi ndings in this report with those 

in previous editions, which are available in the NAFTA, Canada, and Mexico 

Briefi ng Room of the ERS website (www.ers.usda.gov/briefi ng/nafta).
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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 fi rst 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. However, 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 redefi ned as tariff-rate quotas 

(TRQs)1 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. Over the 

years, Canada has been extremely reluctant to consider full trade liberalization of its dairy and poultry sectors, which are governed by supply management and protected by high over-quota tariffs—a long-standing position of 

Canada in its international trade negotiations.

Tariff elimination for the items 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.2

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 scientifi cally 

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 cooperation 

between the NAFTA countries in developing, applying, and enforcing such 

measures. To fulfi ll these responsibilities, the NAFTA governments have 

engaged in a concerted effort to fi ne-tune their SPS measures in ways that 

facilitate trade.

Another important element of the agreement is the establishment of key principles regarding the treatment of foreign investors. These principles include a 

fi rm commitment from each NAFTA country to treat foreign investors from 

1A 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 to additional 

imports.

2While NAFTA’s transition to 

regional 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.

What Is NAFTA?
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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.

Finally, NAFTA created several formal mechanisms for the resolution of 

disputes concerning the agreement’s provisions for investment (Chapter 11) 

and fi nancial services (Chapter 14), the application of national dumping and 

countervailing duty laws (Chapter 19), and the general interpretation and 

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

a strong and orderly framework for addressing disputes involving such diverse 

topics as the Canadian Wheat Board (CWB), U.S. countervailing duties 

on live swine from Canada, Mexican antidumping duties on selected U.S. 

apples, Mexico’s former sales tax on soft drinks and other beverages made 

from sweeteners other than cane sugar, NAFTA’s provisions for cross-border 

trucking between the United States and Mexico, and whether Canada under 

NAFTA could legally apply the over-quota tariffs specifi ed in the URAA to 

U.S. products. As of December 31, 2010, there were no active dispute settlement cases directly concerning agricultural products under Chapters 19 or 20 

of NAFTA, although antidumping and countervailing duties are in effect on a 

handful of products traded among the NAFTA countries.
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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 fl ows of goods, services, capital, and labor. Trade 

in goods consists of not only fi nal consumer products but also intermediate 

inputs and raw materials, as fi rms reorganize their activities around regional 

markets for both inputs and outputs, spurred in part by greater FDI. In addition, decisionmakers in both the government and the private sector pursue 

a course of greater institutional and policy cooperation and coordination to 

encourage market integration.

Table 1 presents an overview of the current status of market integration 

in North American agriculture, using the framework established in ERS’s 

2005 NAFTA report (Zahniser, 2005). Most of North American agriculture 

features a high degree of integration, refl ecting substantial fl ows of crossborder trade and investment and the removal of almost all major barriers 

to trade and investment, in large part due to NAFTA. Several agricultural 

sectors are marked by a medium degree of integration due to the presence 

of one or more signifi cant barriers to trade and/or investment, even though 

cross-border trade and investment is underway. Examples include the U.S. 

and Canadian wheat markets (due to the CWB) and the markets affected 

by Mexico’s retaliatory tariffs in conjunction with the trucking dispute. The 

degree of market integration is generally low in sectors that were excluded 

from CUSTA and NAFTA’s project of agricultural trade liberalization or are 

subject to a major dispute, such as the U.S.-Mexico trucking issue.

Regional Agricultural Trade 

More Than Triples

Agricultural trade within the NAFTA region is recovering from the recent 

global economic downturn (fi g. 2). The total value (exports and imports) 

of U.S. agricultural trade with Canada and Mexico reached about $61.3 

billion in 2010, compared with $60.7 billion in 2008 and $54.7 billion in 

2009. Prior to the downturn, regional agricultural trade had enjoyed a long 

period of sustained growth with few interruptions. Even when accounting 

for the effects of the recent downturn, U.S. agricultural trade with Canada 

and Mexico has more than tripled since NAFTA’s implementation in 1994. 

Increases of this proportion are also present in the volumes of many agricultural commodities traded among the NAFTA countries (app. tables 3-6).

Different methodologies used by ERS researchers to evaluate NAFTA’s trade 

effects generate different estimates. Results of a computable general equilibrium (CGE) model focused on the trade policy changes of NAFTA’s fi rst 

3 years 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 in the agreement’s absence. Over the same period, U.S. 

agricultural imports from Canada and Mexico were about 5 percent and 3 

percent higher, respectively (Crawford and Link, 1997). By contrast, results 

of a gravity model of U.S. agricultural exports during the period 1980-99 

Overview of North American Market 

 Integration
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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

Important cross-border investments in grain milling. Sizable 

increases in U.S. exports to 

Mexico and Canadian exports to 

U.S. Expanded biofuel production increases demand for certain 

grains and oilseeds.

High degree of integration. Strong 

linkages between U.S. grain and 

oilseed farmers and Mexican hog 

and poultry producers. Mexican 

direct investment in U.S. baking and 

tortilla industries.

High degree of integration, except wheat (medium). Growing 

two-way trade encompasses 

bulk commodities, feed ingredients, and processed foods. 

Canadian Wheat Board still 

retains single-desk authority.

Livestock and 

animal products

U.S. and Canadian beef exporters 

regain access to many Asian 

markets following coordinated 

response by NAFTA governments 

to discoveries of bovine 

spongiform encephalopathy 

(BSE) in Canada and U.S.

With the removal of most 

traditional barriers to trade (i.e., 

tariffs and quotas), progress 

in addressing the sanitary 

concerns of importing countries 

becomes crucial to further market 

integration.

High degree of integration regarding U.S. producers and Mexican 

market. U.S. exports to Mexico of 

beef, pork, and poultry meat all 

have doubled in volume during the 

NAFTA period. 

High degree of integration regarding Mexican producers and U.S. 

market in feeder cattle and beef; 

medium-to-low degree in other 

products. Mexican beef and pork 

exporters expand their participation 

in Asian markets.

High degree of integration in 

cattle, beef, hogs, and pork. 

Canadian hog exports to U.S. 

include feeder animals that are 

fi nished in the U.S. Sizable levels of two-way trade in beef.

Low degree of integration in 

dairy and poultry, due to the 

exclusion of these sectors 

from trade liberalization under 

CUSTA and NAFTA.

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 U.S., on both seasonal 

and aggregate levels.

High degree of integration, with 

some exceptions (medium) due to 

trucking dispute. Large volumes of 

bilateral trade. U.S. growers benefi t 

from ties to Mexican supermarkets. Fruit and Vegetable Dispute 

Resolution Corporation closed its 

Mexico offi ce in 2007 due to lack of 

participation by Mexican buyers.

High degree of integration. 

Canadian consumers now have 

duty-free access to full range 

of U.S. produce. Canada has 

emerged as an important supplier of greenhouse vegetables 

to the U.S. Calls for Canada to 

institute a risk mitigation tool for 

produce buyers and sellers.

Sugar and 

sweeteners

Regional sugar and sweetener 

trade is complemented by trade 

in processed foods containing 

sweeteners.

High degree of integration. U.S. 

fructose exports to Mexico and 

Mexican sugar exports to U.S. 

fl ourish following implementation 

of NAFTA’s sugar and sweetener 

provisions.

Low degree of integration. U.S. 

imports from Canada of sugar 

and sugar-containing products 

were exempted from trade 

liberalization under CUSTA and 

NAFTA.

Cotton, textiles, 

and apparel

WTO’s Agreement on Textiles 

and Clothing has led to greater 

competition from China and other 

non-NAFTA countries.

High degree of integration. U.S. 

supplies cotton to Mexico, and 

Mexico supplies cotton textiles and 

apparel to U.S.

High degree of integration. 

U.S.-Canada textile and apparel 

trade continues, but Canada 

shifts away from importation 

and milling of cotton.

Processed foods Sales of Canadian and Mexican 

affi liates of U.S. processed food 

companies still exceed U.S. 

processed food exports to those 

countries.

Medium degree of integration. 

Substantial U.S. investment in 

Mexico’s food industry, with some 

Mexican investments in the U.S. 

food industry. Mexico’s retaliatory 

tariffs discourage U.S. exports of 

soups, broths, and their preparations. Beer is Mexico’s leading 

agricultural export to U.S.

High degree of integration.

Substantial U.S. and Canadian 

direct investment in each other’s 

processed food industries. 

Signifi cant and growing intraindustry trade in intermediate 

and fi nal food products.

Source: USDA, Economic Research Service.
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associate CUSTA and NAFTA with a 74-percent increase in exports to 

Canada during 1989-99 and NAFTA with a 20-percent increase in exports 

to Mexico during 1994-99, although neither of these estimates are statistically signifi cant (Zahniser et al., 2004). Expert assessments in ERS’s 2002 

NAFTA report (Zahniser and Link, 2002) indicate that the agreement’s 

impact on U.S. agricultural trade varies by commodity and trade partner, 

with the biggest changes in trade occurring in the commodities that underwent the most signifi cant reductions in tariff and nontariff barriers. Finally, 

the retaliatory tariffs applied to certain U.S. agricultural exports to Mexico in 

conjunction with the trucking dispute are shown in this report (discussed in 

the following paragraph) to have reduced the total value of these exports by 

about 27 percent.

In addition to increasing regional agricultural trade, NAFTA has helped to 

broaden the seasonal availability of fresh produce and to increase the variety 

of food products available to consumers.3 For instance, trade liberalization 

makes it easier for North American consumers to access fresh tomatoes 

throughout the year, given the existence of protected4 and open-fi eld tomato 

production in each NAFTA country, which as a group have shipping seasons 

that cover 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) fi nd that Mexican agricultural products not imported by 

the United States in 1993 accounted for about 18 percent of U.S. agricultural 

imports from Mexico in 2005. Among the “new varieties” of imports identifi ed by Jabara and Lynch are grape tomatoes and fresh avocados—products 

whose importation has benefi ted not only from trade liberalization under 

NAFTA but also from the introduction of a tomato variety from Taiwan 

(grape tomatoes) and more trade-oriented phytosanitary regulations (fresh 

avocados). Trade liberalization, trade-oriented phytosanitary standards, and 

the rapid development of the Mexican supermarket sector have given Mexican 

consumers much wider opportunities to purchase U.S. noncitrus fruit such as 

apples, pears, grapes, and peaches, to the point where Mexico has surpassed 

Canada to become the leading foreign market for U.S. apples. 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, 

3Feenstra (2010a, 2010b) provides 

a full examination of the gains from 

trade associated with product variety.

4Protected 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, among 

others.

Figure 2

U.S. agricultural trade with Canada and Mexico is recovering 

from the global economic downturn

U.S. dollars (billions) 

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

Census Bureau, Foreign Trade Statistics, as cited by USDA/FAS (2011a).

1990 92 94 96 98 2000 02 04 06 08 10

0

5

10

15

20

Exports to Canada

Exports to Mexico

Imports from Canada

Imports from Mexico
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pears, carrots, lettuce, and potatoes, among other commodities, but all of 

these products were already familiar to Canadian consumers prior to CUSTA.

Net Effect on U.S. Agricultural Employment 

Is Probably Small

NAFTA’s net impact on U.S. agricultural employment is likely to be small, 

in part because of the large size of the sector relative to agricultural trade 

with Canada and Mexico. While the United States had about 3.2 million farm 

operators in 2007, counting both primary and secondary operators,5 results 

from input-output analysis suggest that U.S. agricultural exports to Canada 

and Mexico supported only about 241,000 jobs throughout the U.S. economy 

in 2009.6 Two studies conducted early in the NAFTA period indicated 

that the agreement was not having a major effect on total U.S. agricultural 

employment (Crawford and Link, 1997; Schluter and Gale, 1996), a fi nding 

that is broadly consistent with a more recent study of NAFTA’s impact on the 

U.S. economy as a whole (Arnold, 2003).

Productivity gains also help to explain why CUSTA and NAFTA’s net 

impact on U.S. agricultural employment is small. Yield growth in soybeans, 

for instance, has been so strong over the past two decades that the additional quantities of soybeans, soybean meal, and soybean oil exported 

to Canada and Mexico during the CUSTA-NAFTA period easily could 

have been obtained without any increase in U.S. soybean area (Zahniser 

and Crago, 2009). In the U.S. fruit and vegetable sector, which has experienced greater import competition from both NAFTA and non-NAFTA 

countries, production of such import-competing crops as bell peppers and 

watermelons has increased during the NAFTA period, even though area 

harvested has declined (table 2). At the same time, U.S. producers of some 

crops, such as asparagus, have found it diffi cult to compete with imports, 

and both production and area harvested have declined. More information is 

needed about the rise of greenhouse production in the NAFTA countries, 

however, to conduct a full evaluation of trade liberalization’s impacts on 

fruit and vegetable growers.7

Employment continues to decline in the U.S. textile and apparel sector, 

an agriculture-related industry in which the United States is less competitive because of the availability of cheaper labor in developing countries. 

Between 1993 and 2010, U.S. textile and apparel employment decreased 

from 1,662,000 to about 533,000 (USDOL/BLS, 1994, 2011). The start of 

this decline dates back to the 1970s, and the accord reinforced this long-term 

trend by fostering the development of a more integrated North American 

textile and apparel industry in which capital-intensive operations in the 

United States were complemented by labor-intensive operations in Mexico. 

Over the past decade, however, this industry has faced more intense competition from non-NAFTA countries such as China, Vietnam, Pakistan, and India 

with the implementation of the WTO’s Agreement on Textiles and Clothing, 

and U.S. textile and apparel employment has declined further.

5The primary operator is the one 

“who is most responsible for running 

the farm,” while the secondary operator—in many cases, the primary operator’s spouse or other family member—

assists the primary operator by helping 

to make farm business decisions and 

by providing additional resources, such 

as labor, management, capital, and 

farmland (Hoppe and Banker, 2010: 

p. 21).

6This fi gure is calculated by multiplying the trade multiplier for U.S. 

agricultural exports in 2008 (11,825 

jobs per $1 billion in exports) by the 

value of U.S. agricultural exports 

to Canada and Mexico in that year 

(about $32.3 billion). As 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 1997, the year for which 

the benchmark table was constructed. 

The ERS Agricultural Trade Multipliers (Edmondson, 2011) enable users to 

work with predefi ned multipliers and to 

create their own multipliers.

7Limited data are available on greenhouse production in the NAFTA countries. With respect to the United States, 

while the 2007 Agricultural Census 

provides some information about greenhouse production, previous censuses did 

not, and annual production statistics for 

many fruit and vegetables are limited to 

fi eld production. In addition, methodological changes to the 2007 Agricultural Census enabled USDA’s National 

Agricultural Statistics Service to count 

small farms with greater accuracy, so 

previous censuses may have missed 

some smaller growers.
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Table 2

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

Area harvested

Change

Production

Change

Yield

Change Crop 1991-93 2007-09 1991-93 2007-09 1991-93 2007-09

1,000 hectares Percent 1,000 metric tons Percent

Metric tons per 

hectare Percent

Vegetables and melons, 

 24 crops 735.7 702.9 -4.5 15,212 20,402 34.1 206.8 290.3 40.4

Asparagus1 35.3 13.5 -61.8 103 45 -56.3 29.2 33.4 14.3

Bell peppers1 26.0 21.2 -18.7 635 720 13.4 243.8 339.7 39.4

Broccoli1 43.1 51.4 19.1 521 890 70.9 120.8 173.2 43.4

Caulifl ower1 22.8 14.8 -35.2 313 302 -3.5 137.4 204.4 48.8

Chile peppers1 n.a. 10.6 n.a. n.a. 195 n.a. n.a. 184.1 n.a.

Cucumbers 22.9 16.8 -26.5 448 412 -7.9 195.8 245.2 25.2

Onions1 57.6 62.3 8.3 2,752 3,473 26.2 478.2 557.2 16.5

Tomatoes 53.3 43.0 -19.3 1,623 1,469 -9.5 304.4 341.2 12.1

Watermelons 83.4 51.4 -38.4 1,657 1,776 7.2 198.7 345.7 74.0

Area harvested

Change

Production

Change

Yield

Change Crop 1991-93 2007-09 1991-93 2007-09 1991-93 2007-09

1,000 hectares Percent

1,000 metric tons

fresh equivalent Percent

Metric tons per 

hectare 

fresh equivalent Percent

Noncitrus fruit 808.8 820.4 1.4 14,944 15,960 6.8 n.a. n.a. n.a.

Apples 183.5 141.5 -22.9 4,648 4,278 -8.0 11.4 13.7 20.2

Cranberries 11.7 15.5 32.1 187 323 72.9 7.1 9.3 30.8

Cherries, sweet 18.4 33.7 82.9 149 279 87.3 3.8 3.9 3.1

Cherries, tart 19.6 14.2 -27.7 115 118 3.1 7.1 3.9 -44.7

Grapes 302.4 379.8 25.6 5,323 6,483 21.8 8.1 7.7 -4.3

Papayas2 0.9 0.5 -42.6 29 15 -48.3 n.a. 12.3 n.a.

Peaches 72.2 49.7 -31.2 1,130 1,002 -11.4 7.5 9.1 22.4

Pears 28.3 23.5 -17.1 839 815 -2.8 13.2 15.5 17.1

Strawberries3 19.9 22.2 11.4 621 1,176 89.3 13.9 23.6 69.6

Other noncitrus fruit 151.8 139.8 -7.9 1,903 1,471 -22.7 n.a. n.a. n.a.

Citrus fruit4 359.1 340.3 -5.2 11,765 10,767 -8.5 n.a. n.a. n.a.

Oranges5 261.5 264.7 1.2 8,412 8,287 -1.5 332 324 -2.3

Other citrus fruit 97.6 75.6 -22.5 3,352 2,480 -26.0 n.a. n.a. n.a.

n.a. = not available. Data are not collected for all States that might produce these crops.

1Includes processing total for dual usage crops.

2Data for 2007-09 are for Hawaii only.

3Yields for 2007-09 are based on area harvested.

4Data for citrus fruit correspond to crop years 1990-91 to 1992-93 and 2007-08 to 2009-10 and do not include limes.

5Yield expressed in boxes per acre. 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 data from USDA/NASS (2010a, 2010b, 2010c, 1994a, 1994b, 1993).
12

NAFTA AT 17: Full Implementation Leads To Increased Trade and Integration / WRS-11-01 

Economic Research Service/USDA

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), and in an effort to attract more FDI to the region, the accord instituted 

a number of key principles concerning the treatment of foreign investors, as 

was mentioned earlier. Unfortunately, changes in how the processed food 

sector is defi ned within U.S. FDI statistics, along with restrictions on disclosing 

certain data for individual fi rms, make it diffi cult to utilize U.S. statistics to 

evaluate changes in FDI in the North American processed food sector during 

the NAFTA period. Mexican statistics, however, indicate that Mexico’s food, 

beverage, and tobacco industries attracted net infl ows of additional foreign 

investment totaling $22.9 billion between January 2000 and September 2010 

(Secretaría de Economía, Dirección General de Inversión Extranjera, 2010). 

Roughly half of this capital came from the United States.

U.S. fi rms account for most of the FDI in the North American processed food 

sector, which is currently defi ned in U.S. statistics not to include the beverage 

industry or production agriculture. In 2009, the U.S. direct investment position 

(on a historical-cost basis) in the Canadian processed food industry equaled 

$5.0 billion, while the U.S. direct investment position in the Mexican processed 

food industry equaled $2.5 billion in 2008 (app. table 6). In contrast, the 

Canadian and Mexican direct investment positions in the U.S. processed food 

industry were $1.3 billion and $3.0 billion, respectively. Firms located in the 

NAFTA region sometimes have potential buyers in all three NAFTA countries. 

For instance, in 2002 and 2008, the Mexican baking company Grupo Bimbo 

acquired some of the U.S. interests of a Canadian food conglomerate, George 

Weston Ltd, that once had been owned by U.S. companies, and in 2010, Grupo 

Bimbo purchased Sara Lee’s fresh bakery business for $959 million. Food sales 

associated with U.S. direct investment in Canada and Mexico are substantial. In 

2008, majority-owned affi liates of U.S. multinational food companies had sales 

of $27.6 billion in Canada and $10.9 billion in Mexico (fi g. 3). Together, these 

sales were 123 percent larger than the value of U.S. processed food exports to 

Canada and Mexico.

Figure 3

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

greatly exceed U.S. processed food exports to those countries

U.S. dollars (billions)

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 USDOC/BEA (2010c) 

(affiliate sales) and USDA/FAS (2011a) (processed food exports).

Sales in Canada by U.S. affiliates

Processed food exports to Mexico

Sales in Mexico by U.S. affiliates

Processed food exports to Canada

1999 2000 01 02 03 04 05 06 07 08

0

5

10

15

20

25

30
13

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Economic Research Service/USDA

U.S. agricultural trade with the NAFTA countries experienced a partial 

recovery in 2010, owing to improved economic conditions within the region. 

For many commodities traded within the region, volumes increased and unit 

values rebounded, while U.S. exchange rates with the Canadian dollar and 

the Mexican peso returned to levels similar to those just before the world 

economic downturn. In 2010, the nominal value of U.S. agricultural exports 

to Canada and U.S. agricultural imports from Mexico surpassed the levels 

achieved in 2008, while U.S. agricultural exports to Mexico and U.S. agricultural imports from Canada increased but did not reach their 2008 levels.

A look back at 2009 reveals some of the mechanisms at work in the contraction and subsequent recovery of U.S. agricultural trade. The economic 

downturn had a pronounced impact on U.S. agricultural trade, lowering the 

demand for many commodities and prompting a short-term appreciation of 

the U.S. dollar during late 2008 and early 2009, as international investors 

sought a safe haven for their capital (Shane et al., 2009). Appreciation of 

the U.S. dollar made U.S. exports more expensive to foreign buyers, while 

increasing the affordability of imports to U.S. buyers. Under these more 

diffi cult economic conditions, total U.S. agricultural exports (to all countries) 

from 2008 to 2009 decreased by 14 percent to $98 billion, while corresponding imports fell by 11 percent to $72 billion.

Agricultural trade among the NAFTA countries was not immune to these 

phenomena. In terms of nominal value, U.S. agricultural exports to Canada 

and Mexico decreased by 3 percent and 17 percent, respectively, between 

2008 and 2009, and U.S. agricultural imports from Canada decreased by 

18 percent. In contrast, U.S. agricultural imports from Mexico—led by 

continued growth in fruit and vegetable trade—increased by 3 percent.

At the commodity level, the changes in trade were more varied but consistent 

with this general pattern of contraction. Appendix table 1 lists the 10 leading 

commodities in each of the four trade fl ows that make up U.S. agricultural 

trade with its NAFTA partners: exports to Canada, imports from Canada, 

exports to Mexico, and imports from Mexico. Among these 40 items, 27 

commodity fl ows experienced a decrease in trade value between 2008 and 

2009. These decreases took one of three forms: a decrease in volume and unit 

value, a decrease in volume that more than offset an increase in unit value, 

and a decrease in unit value that more than offset an increase in trade volume.

Figure 4 illustrates the decrease in trade in 2009 for the 16 components 

of regional agricultural trade listed in appendix table 1 that experienced a 

decrease in both volume and unit value. For many of these commodities, 

lower prices (as refl ected in lower unit values) accounted for a large portion 

of the decrease in total trade value. This was particularly true for grains and 

oilseeds. For example, the decrease in unit value accounted for 93 percent of 

the decline in U.S. wheat imports from Canada and 46 percent of the decline 

in U.S. corn exports to Mexico.

Economic Recovery Buoys NAFTA 

 Agricultural Trade
14

NAFTA AT 17: Full Implementation Leads To Increased Trade and Integration / WRS-11-01 

Economic Research Service/USDA

Figure 4

A drop in both volume and unit value lowered trade values of many commodities in 2009

Note: The data in this figure cover calendar years 2008 and 2009. The dark blue portion of each bar indicates the value of trade in 2009, 

while the sum of all three portions of the bar (dark blue, white with red outline, and white with blue outline) equals the value of trade in 2008.

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

as cited by USDA/FAS (2011a).

Value in 2009

Decrease from 2008 due to lower volume

Decrease from 2008 due to lower unit value

U.S. dollars (billions)

Beef exports to Canada

Pork exports to Canada

Corn exports to Canada

Rapeseed oil imports from Canada

Cattle imports from Canada

Beef imports from Canada

Wheat imports from Canada

Swine imports from Canada

Sweet biscuit, waffle, and wafer imports

from Canada, not frozen

Confectionery product imports from Canada,

except chewing gum

Rapeseed imports from Canada

Corn exports to Mexico

Soybean exports to Mexico

Wheat exports to Mexico

Cotton exports to Mexico

Nonfat dry milk exports to Mexico

0 0.5 1.0 1.5 2.0 2.5
15

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Economic Research Service/USDA

In March 2011, the U.S. and Mexican Governments arrived at an agreement 

in principle for the establishment of a reciprocal, phased-in program that will 

authorize both Mexican and U.S. carriers to engage in cross-border, long-haul 

trucking operations under NAFTA. Two years prior, in March 2009, the Mexican 

Government had imposed retaliatory import tariffs on selected U.S. products in 

response to the U.S. cancellation of a demonstration project on NAFTA’s trucking 

provisions. These tariffs, which were expanded and modifi ed in August 2010, 

have adversely affected U.S. agricultural exports to Mexico, depressing the export 

volume and unit value of many of the targeted commodities. Once a fi nal agreement is reached pursuant to the agreement in principle, the Mexican Government 

will gradually suspend the retaliatory tariffs—fi rst by reducing them by 50 percent 

upon the signing of the fi nal agreement and then by suspending the remaining 50 

percent when the fi rst Mexican carrier is granted operating authority under the 

program. Once the program is normalized, Mexico will terminate the retaliatory 

tariffs (White House, 2011; Secretaría de Economía, 2011).

Implementation of Trucking Provisions 

Turns Out To Be a Long Haul

The Omnibus Appropriations Act, 2009, signed into law by President Obama 

on March 11, 2009, ended funding for the demostration project. Over the 

years, some persons had expressed concerns for U.S. highway safety and the 

job security of U.S. truckers if Mexican truckers were allowed to provide 

cross-border services of the type specifi ed by NAFTA. Others called attention to the possible effects on the U.S.-Mexico economic relationship of not 

implementing NAFTA’s trucking provisions as was originally agreed.

Prior to its cancellation, the demonstration project was a small step toward 

implementing NAFTA’s trucking provisions. Specifi cally, the project “allowed 

up to 100 Mexico-domiciled motor carriers to operate beyond the U.S. border 

commercial zones and the same number of U.S. carriers to operate in Mexico” 

(USDOT/FMCSA, 2009a).8 The project was originally initiated in September 

2007 for a 1-year term and then was extended for up to 2 more years “to ensure 

that it could produce suffi cient data to evaluate its safety impact” (USDOC/

ITA, 2010). Carriers participating in the demonstration project were not the 

only Mexico-domiciled carriers allowed to operate in the United States beyond 

these zones, however. Five carriers had received limited authority to do so prior 

to 1982 and were “grandfathered in” when the U.S. Congress enacted a moratorium on Mexico-domiciled carriers that year. In addition, a much larger number 

of majority U.S.-owned, Mexico-domiciled carriers had received limited 

authority before the Interim Final Rules implementing NAFTA’s motor carrier 

provisions were issued in March 2002 (USDOT/FMCSA, 2009b; Downey, 

et al. 2008; NAFTA Arbitral Panel, 2001). These carriers are referred to as 

“certifi cated” in reference to their Certifi cates of Operation. An independent 

evaluation panel (Downey, et al., 2008) concluded that a total of 861 grandfathered or certifi cated Mexican carriers with 1,749 trucks were operating in 

the United States beyond the border commercial zones in 2008. By contrast, 

8The border commercial zones 

extend from 3 to about 25 miles north 

of the U.S.-Mexico border and 75 miles 

north of the border in the State of 

Arizona (USDOT/FMCSA, 2009b: 4). 

The zone’s width varies according to 

the size of particular U.S. municipalities and associated commercial zones 

(Downey et al., 2008: xi).

NAFTA Trucking Issue Intersects With U.S. 

 Agricultural Exports
16

NAFTA AT 17: Full Implementation Leads To Increased Trade and Integration / WRS-11-01 

Economic Research Service/USDA

in 2010, a total of 8,030 Mexican carriers with 30,482 trucks had authority to 

operate only within the U.S. commercial zones (USDOT/FMCSA, 2010).

The United States had agreed as part of NAFTA to allow persons from 

Mexico to obtain operating authority to provide cross-border trucking 

services to or from the border States (California, Arizona, New Mexico, and 

Texas) by December 18, 1995, and to provide cross-border trucking services 

throughout the United States by January 1, 2000 [see the U.S. schedule in 

NAFTA’s “Annex I: Reservations for Existing Measures and Liberalization 

Commitments (Chapters 11, 12, and 14)”]. In turn, Mexico agreed to provide 

access to persons from the United States interested in providing cross-border 

trucking services between the United States and Mexico according to a 

similar timetable. In most instances, transporting cargo by truck between the 

United States and Mexico currently requires at least three vehicles: “a longhaul service that transports the cargo from Mexico/United States to a place 

near the border, a short-haul drayage truck that moves the goods across the 

border, and a third truck that delivers the cargo to its fi nal destination beyond 

the U.S.-Mexico border commercial zone” (Prozzi et al., 2008: 1-2).9

Retaliatory Tariffs Dampen Certain U.S. Agricultural 

Exports to Mexico

Nonresolution of the trucking dispute affects U.S. exporters and Mexican 

consumers because NAFTA’s dispute resolution procedure allows the Mexican 

Government to suspend U.S. trade benefi ts of “equivalent effect” to the crossborder trucking provisions until the two countries settle the dispute. More than 

a decade ago, the Mexican Government won a decision regarding the trucking 

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

December 1995 to postpone implementation of the agreement’s trucking provisions. In February 2001, the panel’s fi nal report indicated that “the U.S. blanket 

refusal to review and consider for approval any Mexican-owned carrier application for authority to provide cross-border trucking service was and remains a 

breach” of U.S. obligations under NAFTA (NAFTA Arbitral Panel, 2001: p. 83), 

thereby authorizing retaliation should the dispute not be resolved.

Table 3 includes a list of the U.S. agricultural products covered by the original set of retaliatory tariffs published in March 2009 and the revised set 

published in August 2010. Prior to the enactment of these tariffs, all of these 

products had received duty-free treatment in Mexico as a result of NAFTA. 

Some of the retaliatory tariffs target nonagricultural products, but these are 

not listed in the table. The expanded list of agricultural commodities includes 

four tariff lines that corresponded to more than $100 million each in U.S. 

agricultural exports to Mexico in 2008—the calendar year before the retaliatory tariffs were implemented:

• Fresh or chilled pork, bone-in ($367 million);

• Fresh apples ($221 million);

• Preparations for soups and broths, and prepared soups and broths ($178 

million); and

• Condiments other than soy sauce, ketchup, other tomato sauces, mustard 

meal, and prepared mustard ($113 million).

9NAFTA’s provisions for crossborder trucking services between 

the United States and Mexico do not 

apply to routes exclusively within 

either country. In other words, NAFTA 

does not require the United States to 

allow persons from Mexico to obtain 

operating authority to provide trucking 

services from one point in the United 

States to another, nor does it require 

Mexico to allow persons from the United States to obtain operating authority 

to provide trucking services from one 

point in Mexico to another.
17

NAFTA AT 17: Full Implementation Leads To Increased Trade and Integration / WRS-11-01 

Economic Research Service/USDA

Table 3

Mexico has applied retaliatory tariffs on over 50 U.S. agricultural products

Tariff line Description

Tariff rate, effective:

March 18, 

2009, to 

August 17, 

2010

August 18, 

2010 to 

present

Percent

0203.12.01 Meat of swine, legs, hams, and cuts thereof, bone-in, fresh or chilled -- 5

0203.22.01 Meat of swine, legs, hams, and cuts thereof, bone-in, frozen -- 5

0406.10.01 Fresh cheese (unripened or uncured), including that from whey cheese, and curd -- 25

0406.30.99 Processed cheese, not grated or powdered; excluding that product with a fat content 

less than or equal to 36 percent by weight and with an average fat content in dry 

extract greater than 48 percent, presented in packages larger than 1 kilogram

-- 25

0406.90.04 Grana o Parmigiano-Reggiano cheese, with a fat content less than or equal to 40 

percent by weight, and with a water content, in nonfat material, less than or equal to 

47 percent by weight; Danbo, Edam, Fontal, Fontina, Fynbo, Gouda, Havarti, Maribo, 

Samsoe, Esrom, Italico, Kernhem, Saint-Nectaire, Saint-Paulin, or Taleggio cheese, 

with a fat content less than or equal to 40 percent by weight, and with a water content, 

of nonfat materials, greater than 47 percent and less than 72 percent by weight

-- 20

0406.90.99 Cheese, not elsewhere specifi ed or indicated -- 25

0604.91.02 Christmas trees, fresh 20 20

0703.10.01 Onions 10 10

0705.11.01 Iceberg lettuce 10 10

0710.40.01 Sweet corn -- 15

0802.12.01 Almonds, shelled 20 20

0802.50.01 Pistachios, fresh -- 20

0802.50.99 Pistachios, other -- 20

0804.10.01 Dates, fresh 20 20

0804.10.99 Dates, other 20 20

0805.10.01 Oranges, fresh or dried -- 20

0805.40.01 Grapefruit or pomelos, fresh or dried -- 20

0806.10.01 Grapes, fresh 45 20

0808.10.01 Apples, fresh -- 20

0808.20.01 Pears, fresh 20 20

0809.10.01 Apricots, fresh -- 20

0809.20.01 Cherries, fresh -- 20

0810.10.01 Strawberries, fresh 20 20

0813.30.01 Apples, dried -- 20

0813.50.01 Mixtures of dried fruit or nuts 20 20

1104.12.01 Oatmeal -- 10

1602.49.01 Cooked pork rinds -- 20

1704.10.01 Chewing gum, including those coated in sugar -- 20

1806.31.01 Chocolate or other food preparations containing cocoa, blocks, tablets, or bars, fi lled, 

less than or equal to 2 kilograms in mass

-- 20

1806.32.01 Chocolate or other food preparations containing cocoa, blocks, tablets, or bars, not 

fi lled, less than or equal to 2 kilograms in mass

-- 20

—continued
18

NAFTA AT 17: Full Implementation Leads To Increased Trade and Integration / WRS-11-01 

Economic Research Service/USDA

Table 3

Mexico has applied retaliatory tariffs on over 50 U.S. agricultural products—Continued

Tariff line Description

Tariff rate, effective:

March 18, 

2009, to 

August 17, 

2010

August 18, 

2010 to 

present

Percent

1902.19.99 Pasta, not containing egg, not cooked, fi lled, or otherwise prepared 10 10

2004.10.01 Potatoes, frozen 20 5

2005.40.01 Peas, prepared or preserved, except in vinegar or acetic acid, not frozen 20 20

2008.11.01 Peanuts, shelled 20 --

2008.11.99 Peanuts, with shell 20 20

2008.19.01 Almonds, prepared or preserved 20 20

2008.19.99 Nuts other than peanuts or almonds, prepared or preserved, including mixed nuts 20 20

2008.60.01 Cherries, prepared or preserved 20 20

2009.80.01 Fruit or vegetable juice, other than orange, grapefruit, other citric fruit, lime, pineapple, 

tomato, grape, or apple

20 20

2009.90.01 Mixtures of vegetable juice only 20 20

2009.90.99 Mixtures of fruit or vegetable juice, other than mixtures of vegetable juice only 20 20

2103.10.01 Soy sauce 20 20

2103.20.01 Ketchup -- 20

2103.90.99 Condiments, other than soy sauce, ketchup, other tomato sauces, mustard meal, and 

prepared mustard

20 20

2104.10.01 Prepared soups and broths and preparations for such foods 10 10

2106.90.06 Concentrates of juice from a single fruit or vegetable, enriched with vitamins or minerals 15 15

2106.90.07 Concentrates of juice from more than one fruit or vegetable, enriched with vitamins or 

minerals 15 15

2106.90.08 Food preparations not elsewhere specifi ed or indicated, with a content of milk solids 

greater than 10 percent, in weight 15 15

2201.10.01 Mineral water 20 20

2204.10.99 Sparkling wine, other than champagne 20 20

2204.21.02 Red, rose, claret, or white wine, whose alcoholic strength by volume is up to 14 percent 

at a temperature of 20 degrees Celsius, in containers of clay, ceramics, or glass less than 

or equal to 2 liters

20 20

2206.00.99 Other fermented beverages or mixtures of fermented and non-alcoholic beverages, not 

elsewhere specifi ed 20 20

2306.30.01 Sunfl ower seed meal and oilcake 15 15

2306.49.99 Rapeseed meal or oilcake, with a high content of erucic acid 15 15

2309.10.01 Dog or cat food, for retail sale 10 10

-- = not applicable.

Source: Unoffi cial author translation of Secretaría de Gobernación (2009, 2010).
19

NAFTA AT 17: Full Implementation Leads To Increased Trade and Integration / WRS-11-01 

Economic Research Service/USDA

The tariff rates now range from 5 to 25 percent. As part of the revised set of 

tariffs issued in August 2010, the Mexican Government lowered the retaliatory tariff rates on two agricultural commodities: fresh grapes (from 45 to 10 

percent) and frozen potatoes (from 20 to 5 percent).

Suffi cient data are available to consider the impact of Mexico’s retaliatory 

tariffs during the fi rst year that they were in effect. Table 4 provides data on 

the level of Mexican agricultural imports from the United States targeted by 

the tariffs from March 2009 to February 2010 and the average annual level of 

this trade during the 36 months prior to the tariffs’ enactment (March 2006 to 

February 2009). The period of March 2009 to February 2010 roughly corresponds with the fi rst 12 months of the retaliatory tariffs. Many of the targeted 

imports have declined in volume, unit value, and value since the imposition 

of the retaliatory tariffs. Only a portion of these changes may be attributed 

to the tariffs, however, as other factors, such as the contraction in Mexican 

demand associated with the global recession, also likely contributed to the 

decline. By subtracting the percentage decline experienced by those Mexican 

agricultural imports from the United States not covered by the retaliatory 

tariffs (5.5 percent) from the percentage decline experienced by those imports 

covered by the tariffs (32.6 percent), one can obtain a rough estimate of the 

retaliatory tariffs’ impact. Thus, the tariffs reduced the total value of the 

targeted U.S. agricultural exports to Mexico during this period by an additional 27.1 percent, compared with the level during the previous 36 months, 

or about $240 million.
20

NAFTA AT 17: Full Implementation Leads To Increased Trade and Integration / WRS-11-01 

Economic Research Service/USDA

Table 4

Mexico’s retaliatory tariffs have had a pronounced effect on Mexican agricultural imports 

from the United States

Mexican agricultural imports from 

the United States Value Volume Unit value

HS Code Product

Annual 

average, 

March 

2006-

February 

2009

March 

2009-

February 

2010 Change

Annual 

average, 

March 

2006-

February 

2009

March 

2009-

February 

2010 Change

Annual 

average, 

March 

2006-

February 

2009

March 

2009-

February 

2010 Change

Million dollars Percent Metric tons Percent Dollars per kilogram Percent

Total 15,754.06 14,646.45 -7.0 -- -- -- -- -- --

Not subject to retaliatory tariffs 14,866.86 14,048.33 -5.5

Subject to retaliatory tariffs 887.20 598.13 -32.6 -- -- -- -- -- --

 06049102 Christmas trees, fresh 18.66 12.08 -35.3 23,324 21,341 -8.5 1.19 0.56 -53.0

 07031001 Onions 36.09 18.75 -48.1 78,752 73,157 -7.1 0.41 0.26 -37.7

 07051101 Iceberg lettuce 21.61 5.79 -73.2 49,596 20,414 -58.8 0.45 0.34 -24.2

 08021201 Almonds, shelled 29.26 23.01 -21.4 5,347 6,396 19.6 5.63 3.51 -37.6

 08041001 Dates, fresh 0.49 0.41 -15.3 345 281 -18.5 2.06 1.29 -37.7

 08041099 Dates, other 0.23 0.25 10.0 67 69 2.4 5.45 4.88 -10.5

 08061001 Grapes, fresh 65.83 16.38 -75.1 50,199 19,916 -60.3 1.38 0.79 -42.5

 08082001 Pears, fresh 70.80 52.11 -26.4 72,831 71,968 -1.2 0.98 0.75 -23.1

 08101001 Strawberries, fresh 27.31 13.94 -49.0 21,494 14,070 -34.5 1.83 1.38 -25.0

 08135001 Mixtures of dried fruit or nuts 5.13 3.99 -22.1 910 708 -22.2 5.63 5.69 1.1

 19021999 Pasta, not containing egg, not 

 cooked, fi lled, or otherwise 

 prepared

1.77 6.52 269.3 1,016 2,444 140.5 1.74 2.66 53.0

 20041001 Potatoes, frozen 80.51 39.08 -51.5 82,595 39,593 -52.1 0.98 0.98 -0.1

 20054001 Peas, prepared or preserved,

 except in vinegar or acetic acid, 

 not frozen

0.44 0.25 -42.7 388 172 -55.7 1.17 1.47 24.9

 20081101 Peanuts, shelled 3.24 7.33 126.0 1,260 3,686 192.7 2.79 2.00 -28.4

 20081199 Peanuts, with shell 2.82 2.07 -26.7 1,216 839 -31.0 2.51 2.84 13.1

 20081901 Almonds, prepared or preserved 2.28 3.47 52.4 306 582 90.1 7.70 6.16 -20.0

 20081999 Nuts other than peanuts or 

almonds, prepared or preserved, 

including mixed nuts

67.58 39.23 -42.0 27,769 12,836 -53.8 2.51 3.11 23.9

 20086001 Cherries, prepared or preserved 7.60 4.06 -46.6 3,059 1,665 -45.6 2.51 2.65 5.6

 20098001 Fruit or vegetable juice, other 

 than orange, grapefruit, other 

 citric fruit, lime, pineapple, 

 tomato, grape, or apple1

6.35 5.67 -10.7 3,406 1,975 -42.0 2.66 2.91 9.5

 20099001 Mixtures of vegetable juice only1 0.23 0.32 35.8 112 110 -1.6 2.43 2.56 5.1

 20099099 Mixtures of fruit or vegetable 

 juice, other than mixtures of 

 vegetable juice only1

12.21 11.82 -3.2 3,952 2,916 -26.2 3.15 3.99 26.8

 21031001 Soy sauce 5.39 4.93 -8.4 4,202 3,661 -12.9 1.28 1.34 5.2

 21039099 Condiments, other than soy 

 sauce, ketchup, other tomato 

 sauces, mustard meal, and 

 prepared mustard

108.24 95.88 -11.4 54,496 47,566 -12.7 1.99 2.02 1.2

—continued
21

NAFTA AT 17: Full Implementation Leads To Increased Trade and Integration / WRS-11-01 

Economic Research Service/USDA

Table 4

Mexico’s retaliatory tariffs have had a pronounced effect on Mexican agricultural imports 

from the United States—Continued

Mexican agricultural imports from 

the United States Value Volume Unit value

HS Code Product

Annual 

average, 

March 

2006-

February 

2009

March 

2009-

February 

2010 Change

Annual 

average, 

March 

2006-

February 

2009

March 

2009-

February 

2010 Change

Annual 

average, 

March 

2006-

February 

2009

March 

2009-

February 

2010 Change

Million dollars Percent Metric tons Percent Dollars per kilogram Percent

 21041001 Prepared soups and broths, 

 and preparations for such 

 foods

183.88 146.79 -20.2 50,617 43,874 -13.3 3.65 3.35 -8.3

 21069006 Concentrates of juice from a 

 single fruit or vegetable, 

 enriched with vitamins or 

 minerals

0.60 0.28 -52.6 365 166 -54.4 3.53 3.27 -7.4

 21069007 Concentrates of juice from more 

 than one fruit or vegetable, 

 enriched with vitamins or 

 minerals

1.56 0.69 -56.0 376 223 -40.6 4.22 3.24 -23.3

 21069008 Food preparations not elsewhere

 specifi ed or indicated, with a 

 content of milk solids greater 

 than 10 percent in weight

11.03 13.36 21.1 2,436 3,387 39.1 4.54 4.02 -11.5

 22011001 Mineral water1 2.35 3.32 41.2 9,632 13,859 43.9 0.29 0.24 -18.2

 22041099 Sparkling wine, other than 

 champagne1 0.74 0.81 9.0 233 254 9.0 3.16 4.48 41.6

 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

5.64 5.05 -10.6 1,460 1,605 9.9 4.24 3.24 -23.7

 22060099 Other fermented beverages 

 or mixtures of fermented and 

 non-alcoholic beverages, not 

 elsewhere specifi ed1

13.29 7.43 -44.1 7,747 4,947 -36.1 1.70 1.48 -12.6

 23063001 Sunfl ower seed meal and oilcake 0.89 0.48 -46.0 4,564 1,950 -57.3 0.21 0.24 13.4

 23064999 Rapeseed meal or oilcake with a

 high content of erucic acid

0.13 * -100.0 406 * -100.0 0.33 0.12 -63.6

 23091001 Dog or cat food, for retail sale 93.02 52.57 -43.5 126,868 44,490 -64.9 0.78 1.19 53.3

Note: Table presents data only for those products subject to the retaliatory tariffs in effect from March 18, 2009, to August 17, 2010.

-- = not applicable.

* = less than $5,000 in value and less than 500 kilograms in volume.

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

Source: Mexico, Secretariat of Economy, as cited by Global Trade Information Services, Inc. (2011).
22

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In 2009, the United States adopted mandatory country-of-origin labeling 

(COOL) requirements for beef and pork, among other commodities. These 

requirements are relevant to U.S. agricultural trade with Canada and Mexico 

because the United States imports live cattle and live hogs from Canada 

and live cattle from Mexico for use in U.S. meat production. In 2010, these 

imports included 1.1 million head of cattle from Canada, 5.7 million hogs 

from Canada, and 1.2 million head of cattle from Mexico.

Mandatory COOL provides U.S. consumers with greater information about 

the geographic origin of their retail food purchases. COOL’s implementation 

is the responsibility of USDA’s Agricultural Marketing Service (AMS), and 

details of the COOL requirements are found in a fi nal rule that took effect 

on March 16, 2009 (USDA/AMS, 2009). The rule requires U.S. retailers 

to provide COOL for 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; and perishable agricultural commodities (i.e., fresh or frozen fruit and vegetables). These requirements are in addition to COOL requirements already in effect for wild and 

farm-raised fi sh and shell fi sh.

Several of the labeling categories specifi ed by the fi nal rule directly concern 

meat obtained from imported livestock. Muscle cuts of meat obtained from 

animals born and raised in a foreign country and then imported for immediate slaughter in the United States are to be labeled as “Product of Country 

X and the U.S.A.” Muscle cuts obtained from animals born in a foreign 

country and then raised and slaughtered in the United States are to be labeled 

as “Product of U.S.A., Country X, and Country Y (as applicable),” where 

Country X (or Y) designate the country of birth. The countries may be listed 

in any order. Animals born, raised, and slaughtered in the United States and 

imported animals may be commingled during a single production day, and 

the resulting muscle cuts may also be labeled as “Product of U.S.A., Country 

X, and Country Y (as applicable),” with the countries listed in any order. 

For ground meat, the retailer is required to identify all countries where the 

product originated or all reasonably possible countries where the product may 

have originated.

The Canadian and Mexican Governments have raised concerns about U.S. 

COOL requirements and their impact on the North American market and are 

challenging the requirements at the WTO. In November 2009, a single panel 

was established to examine these complaints. The panel was composed in 

May 2010, and the fi rst and second substantive meetings among the parties 

took place in September and December 2010, respectively, at the WTO headquarters in Geneva. At the request of the parties, these substantive meetings 

were open to public viewing. A fi nal ruling is anticipated in 2011 (WTO, 

2011a, 2011b).

Country-of-Origin Labeling and Livestock 

 and Meat Trade
23

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Creation of an 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 fi eld 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 grain and oilseeds under CUSTA and NAFTA primarily involved 

the elimination of minor tariffs on bilateral trade. The major exceptions to 

this pattern concern wheat and wheat products.

Rising Demand for Feed 

and Food Drives Integration

Rising demand for feed and food has created new opportunities for regional 

trade in grains and oilseeds. Poultry and hog producers in Mexico, for 

instance, rely heavily on U.S. feedstuffs as they seek to meet their country’s 

growing demand for meat. As a result, U.S. exports to Mexico of feed grains, 

oilseeds, and related products have increased by 134 percent during the 

NAFTA period, averaging 19.5 million metric tons per year during 2006-10, 

compared with 8.3 million metric tons during 1989-92 (fi g. 5).11 Duty-free 

access to U.S. feedstuffs enables Mexican livestock producers to expand 

output, lower their costs of production, and compete more effectively with 

meat imports, and it has made possible a substantial increase in Mexican 

meat consumption. Between 1993 and 2010, per capita consumption of broiler 

meat in Mexico rose from 16 to 30 kilograms (an 86-percent increase), 

while per capita consumption of pork climbed from 10 to 16 kilograms (a 

55-percent increase).12 Canada’s poultry and hog producers also utilize some 

U.S. feedstuffs—most notably corn and soybean meal—and expanded use of 

11The 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.

12These calculations are made using 

consumption estimates from USDA/FAS 

(2011b) and population estimates from 

the USDOC/Census Bureau (2010).

A North American Market for Grains, 

 Oilseeds, and Related Products

Figure 5

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

Million metric tons

Note: In this graph, 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 (2011a) (exports) 

and (SAGARPA/SIAP) (2011b) (production).

Mexican pork & poultry production (right axis)

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

1990 92 94 96 98 2000 02 04 06 08 10

0

2

4

6

8

10

12

14

16

18

20

22

0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

Million metric tons (carcass weight)
24

NAFTA AT 17: Full Implementation Leads To Increased Trade and Integration / WRS-11-01 

Economic Research Service/USDA

corn by Canada’s ethanol producers is boosting demand for corn, even though 

livestock numbers in Canada are decreasing (Gray, 2010). Canada also uses 

wheat to produce ethanol.

Feed ingredient trade among the NAFTA countries encompasses a diversity 

of products. For example, Mexican poultry producers estimated the following 

composition of their agricultural inputs during their 2010 marketing year: 

sorghum and yellow corn (63 percent), oilseeds and protein meals (20 

percent), and other feed ingredients (17 percent), such as saffl ower, orthophosphate, calcium, and methionine (Unión Nacional de Avicultores, 2010; 

Flores, 2008: p. 17). A close examination of U.S. trade statistics (app. tables 

2-5) reveals substantial levels of 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 brewers’ and distillers’ dregs 

and waste. This latter category includes distiller’s dried grains with solubles 

(DDGS), a co-product of ethanol production that is used to feed livestock.

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 to 112 million (25 percent) between 1993 and 2010, but the area planted 

with rice and wheat in Mexico is lower than it was during the early 1990s.13

In 2010, annual per capita wheat consumption in Mexico equaled about 56 

kilograms, 8 percent lower than in 1993, while per capita rice consumption 

equaled about 7.3 kilograms, 35 percent higher than in 1993. In 2010, U.S. 

rice exports to Mexico reached about 807,000 metric tons, a level just short 

of the record high in 2009. Even though rice is a staple food for most lowerincome families in Mexico, per capita rice consumption in the country is 

still low and Mexico continues to be a growth market for U.S. rice exporters 

(Juarez and Ford, 2010).

U.S. Corn Exports to Mexico 

More Than Quadruple in Volume

NAFTA has provided much of the legal framework for a tremendous expansion in U.S. corn exports to Mexico. Compared with their average annual 

volume during the decade prior to NAFTA (1984-93), these exports have 

more than quadrupled. The export volume for 2010, 9.7 million metric tons, 

included 7.9 million metric tons of conventional corn, 1.6 million metric tons 

of DDGS, and 160,000 metric tons of cracked corn, which consists of broken 

or ground kernels and is used as animal feed (fi g. 6). U.S. corn exports 

(including cracked corn and DDGS) to Mexico accounted for 32 percent of 

Mexico’s supply during 2005-09, compared with 14 percent during 1984-93. 

Yellow corn, used primarily as animal feed 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 3 percent of these 

exports during 2005-09.

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 fi nally eliminated in 2008. These 

13By comparison, Canada’s population increased from 29 to 34 million 

(16 percent) between 1993 and 2010, 

while the U.S. population grew from 

260 to 310 million (19 percent).
25

NAFTA AT 17: Full Implementation Leads To Increased Trade and Integration / WRS-11-01 

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TRQs were far too small to accommodate Mexico’s growing demand for 

corn, and 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 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 demand. During 2005-09, average annual production was 61 percent 

higher than the corresponding average during 1984-93 (fi g. 7). 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, due 

in part to yield improvements. Rainfed lands account for about 55 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 

agricultural year.

Mexico currently prohibits the planting of genetically modifi ed (GM) corn 

in its territory, but experimental trials of GM corn in Mexico have been 

underway since October 2009. Some Mexican corn farmers may already 

have planted GM varieties without offi cial permission. In September 2008, 

SENASICA, Mexico’s agency concerned with sanitary and phytosanitary 

conditions in the agrifood sector,14 announced that it had detected about 70 

hectares of GM corn planted in the State of Chihuahua (SAGARPA, 2008). 

In January 2009, the Secretariat of the Commission for Environmental 

Cooperation (CEC)15 received a citizen submission from several agricultural 

and environmental organizations asserting that the Mexican Government 

14SENASICA stands for the National 

Service for Animal and Plant Health, 

Food Safety, and Quality (Servicio Nacional de Sanidad, Inocuidad y Calidad 

Agroalimentaria). It is part of Mexico’s 

Secretariat of Agriculture, Livestock, 

Rural Development, Fishing, and Food 

(SAGARPA—Secretaría de Agricultura, Ganadería, Desarrollo Rural, 

Pesca, y Alimentación), and its responsibilities roughly correspond to those 

of USDA’s Animal and Plant Health 

Inspection Service (APHIS) and Food 

Safety and Inspection Service (FSIS).

15The CEC is the international 

organization formed by the NAFTA 

countries in partial fulfi llment of 

the North American Agreement for 

Environmental Cooperation, the environmental accord that accompanied 

NAFTA. Information about the CEC’s 

activities is available on its website: 

www.cec.org.

Figure 6

Distiller’s dried grains with solubles complement U.S. corn 

exports to Mexico 

Million metric tons

Note: DDGS = distiller’s 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, 

Census Bureau, Foreign Trade Statistics, as cited by USDA/FAS (2011a) (total corn and 

cracked corn exports), and USDA/AMS (1991-2005, 2006-11) (white corn exports).

1991 93 95 97 99 2001 03 05 07 09

0

2

4

6

8

10

12

Yellow and mixed

DDGS

White

Cracked

Calendar year
26

NAFTA AT 17: Full Implementation Leads To Increased Trade and Integration / WRS-11-01 

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is not effectively enforcing its laws concerning the control, inspection, and 

investigation of gene fl ow allegedly originating from GM corn in Chihuahua. 

The CEC Secretariat is not a court, but it is empowered to produce a Factual 

Record regarding citizen submissions on enforcement matters. In December 

2010, the CEC concluded that the submission did not warrant the development of a factual record since assertions raised in the submission are subject 

to pending proceedings in Mexico.

Barriers Removed From U.S.-Canada Trade 

in Wheat and Wheat Products

CUSTA and NAFTA contributed to expanded U.S.-Canada trade in wheat 

and wheat products (see app. tables 4-5) by removing a number of signifi cant 

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 

and its subsidies for shipping grain to the United States through the Port of 

Vancouver, as part of Canada’s Western Grain Transportation Act (WGTA). 

Some of the tariffs in effect prior to CUSTA were fairly high. For instance, 

certain types of pasta traded between the two countries faced tariffs as high 

as 17.5 percent, and U.S. wheat fl our exports to Canada were subject to a tariff 

that would have had an ad valorem equivalent of about 12 percent in 2010.

During the fi rst 5 years of CUSTA (1989-93), U.S. wheat exports 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 and NAFTA 

but also to new international trading rules within the URAA that required 

Canada to eliminate the WGTA’s transportation subsidies 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 northsouth orientation for Canadian wheat shipments.16 Exchange rates (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 

routine but small component of U.S. wheat supply. An annual average of 2.2 

16In recent years, Canadian wheat 

exports have made much greater use 

of newly expanded seaports, such as 

Churchill on the Arctic Ocean.

Figure 7

Mexican corn production has increased during the NAFTA period

Million metric tons

Source: USDA, Economic Research Service using data from SAGARPA/SIAP (2011a).

Total

Rainfed

Irrigated

1980 82 84 86 88 90 92 94 96 98 2000 02 04 06 08

0

5

10

15

20

25

Agricultural year
27

NAFTA AT 17: Full Implementation Leads To Increased Trade and Integration / WRS-11-01 

Economic Research Service/USDA

million metric tons was imported from Canada during 2006-10, accounting 

for about 2 percent of the U.S. wheat supply.

Several factors continue to inhibit the integration of the North American market 

for wheat and wheat products. The wheat trading practices of the Canadian 

Wheat Board continue to be an issue of contention for the United States. The 

CWB is a shared governance marketing organization that operates as a national 

monopsony (i.e., single buyer) for wheat and barley produced in Alberta, 

Manitoba, Saskatchewan, and the Peace River District of British Columbia. 

For many years, the U.S. Government and the U.S. wheat industry have argued 

that the CWB “takes 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 “fi nancial cushion” to discount 

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

Canada’s current government has sought to end the CWB’s status as the sole 

buyer and marketer of Canadian wheat and barley, with mixed results. In 

2007, the government amended the Canadian Wheat Board Regulations and 

removed barley from the CWB’s single desk trading authority (Agriculture 

and Agrifood Canada, 2008). A Canadian federal court, however, reversed 

the government’s amendments, stating that any changes to barley or wheat 

marketing must be done through changes to legislation and not through 

changes to regulation. Skirmishes between the CWB and the Canadian 

Government continue on such issues as the legality of the CWB using its 

funding for its own advocacy campaigns and the defi nition of the CWB’s 

electorate. In January 2010, Canada’s Supreme Court left in place a government directive issued in 2006 that prohibits the CWB from spending funds 

“on advocating the retention of its monopoly powers” (Gray, 2010; Offi ce of 

the Minister of the Agriculture and Agri-food and Minister for the Canadian 

Wheat Board, 2006). And, in May 2010, Canada’s agricultural minister introduced a bill in the House of Commons that would limit the CWB’s electorate 

to producers who had produced or were entitled to receive at least 40 tons of 

wheat, oats, barley, rye, fl axseed, rapeseed, and/or canola in the crop year in 

which the election takes place or the previous 2 crop years (Mahabir, 2010).

The CWB is not the only issue of concern in bilateral wheat trade. While 

many of the Canadian regulations that discriminated against U.S. grain 

at Canadian grain elevators and within the Canadian rail transportation 

system have been amended during the CUSTA-NAFTA period (e.g., Canada 

Grain Act, Canada Transportation Act, and removal of the Kernal Visual 

Distinguishability requirements), Canada continues to require that seed be 

registered for use in Canada. This regulation limits the ability of Canadian 

farmers to grow U.S. seed varieties.
28

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Tariff elimination for the numerous livestock and animal products addressed 

by NAFTA concluded on January 1, 2008, with the removal of Mexico’s TRQ 

on U.S. nonfat dry milk (NFDM). However, several U.S. animal product 

exports to Mexico—including pork and several categories of cheese—are 

now subject to retaliatory tariffs in conjunction with the trucking dispute 

(see table 3). Beyond the retaliatory tariffs, the opportunities for free trade 

to advance the integration of North America’s livestock and animal product 

sectors are not yet exhausted, since NAFTA did not liberalize dairy and 

poultry trade between Canada and the United States or between Canada 

and Mexico. These exemptions stem from Canada’s continued reluctance 

to abandon supply management in its dairy and poultry sectors. For those 

sectors where regional free trade in livestock and meat products already 

exists, the key to further integration lies primarily in greater coordination 

of sanitary regulations, more effective control of animal diseases, and the 

prevention of unsanitary conditions that could lead to trade restrictions.

U.S. Nonfat Dry Milk and Chicken Leg Quarters 

Gain Duty-Free Access to Mexico

Three aspects of North America’s livestock and animal product markets have 

become more integrated in recent years. First, U.S.-Mexico dairy trade is now 

completely free of tariffs and quotas, except for selected categories of U.S. 

cheese covered by the retaliatory tariffs mentioned previously. NFDM is the 

leading U.S. dairy export to Mexico, and it was the only item among livestock 

and animal products subject to a 14-year, transitional TRQ under NAFTA. 

Elimination of this restriction has led to higher levels of U.S. NFDM exports 

to Mexico. In 2010, these exports equaled about 124,000 metric tons, 

compared with an annual average of 81,000 metric tons during 2003-07 (the 

last 5 years of the TRQ).

A second aspect of the livestock and meat sectors that has become more 

integrated recently is U.S. exports of chicken leg quarters (CLQs) to Mexico. 

A temporary safeguard TRQ on this trade expired at the same time as 

Mexico’s TRQ on U.S. NFDM. However, the safeguard on CLQs was the 

result of a bilateral agreement signed by the U.S. and Mexican Governments 

in July 2003 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. In 2010, 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 totaled 256,000 metric tons, compared with 173,000 

metric tons in 2007, the last year of the safeguard (Secretaría de Economía, 

as reported by Global Trade Information Services, 2011). In February 2011, 

the Mexican Government launched an antidumping investigation concerning 

chicken legs and thighs imported from the United States (Secretaría de 

Economía, 2011b).

Livestock and Animal Product Markets 

 Experience Further Integration
29

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Cattle and Beef Sectors Continue Their Recovery 

From the BSE Discoveries of 2003

North America’s cattle and beef sectors are a third aspect of the livestock and 

meat markets that has become more integrated in recent years. Establishment 

of greater control over the risk factors associated with bovine spongiform 

encephalopathy (BSE)17 has enabled the cattle and beef industries to recover, 

at least in part, from the economic disruptions that followed the discovery of 

this disease in Canada in May 2003 and in the United States in December 

2003.18 In response to these discoveries, sanitary barriers were erected to 

prevent U.S. imports of Canadian cattle and beef, and many countries—

including Mexico—imposed similar restrictions on imports from both 

Canada and the United States. In response, the NAFTA governments made 

a concerted effort over the next 4 years to coordinate their sanitary policies 

related to BSE, to upgrade international standards in this area, and to achieve 

the resumption of regional cattle and beef trade by gradually modifying their 

sanitary requirements for specifi c types of cattle and beef, usually based on 

the age of the animal.19 In addition, the U.S. and Canadian Governments have 

worked to regain market access to non-NAFTA countries that had imposed 

import bans on U.S. and Canadian beef following the BSE discoveries.

The cattle and beef markets of Canada and the United States are gradually resembling those that existed before the BSE discoveries. In 2010, 

beef production in Canada and the United States was about 1 percent and 

5 percent below their respective levels in 2002 (USDA/FAS, 2010), while 

beginning-of-the-year stocks of Canadian beef cows in 2011 were 7 percent 

below their 2002 level (USDA/FAS, 2011b). Reopening the U.S. border to 

Canadian cattle less than 30 months of age in 2005 and to Canadian cattle 30 

months of age or older in 2007 has facilitated the reduction of these inventories, which increased to unusually high levels during the period when the 

border was closed.

Ultimately, how well North American beef sells outside the NAFTA region 

will indicate the extent to which the industry has recovered following the 

BSE discoveries. In 2010, U.S. beef exports to non-NAFTA countries were 

about 15 percent lower than they were in 2002. U.S. and Canadian beef 

exporters are working to reestablish their previous sales volumes in Japan 

and South Korea, where they have lost market share to Australia and New 

Zealand. While U.S. beef exporters have regained limited access to the 

markets of both Japan and South Korea, South Korea’s beef market is still 

closed to Canadian product, even though the World Organization for Animal 

Health (known by its historical French acronym, OIE) recognizes both the 

United States and Canada as having a controlled risk of BSE. In 2009, the 

Canadian Government requested consultations about South Korea’s restrictions on Canadian beef at the WTO. When that step was unsuccessful in 

effecting a change, the case moved into dispute resolution. The fi nal report is 

expected in April 2011. Interestingly, Mexico has established itself as a beef 

exporter since the BSE discoveries of 2003 in Canada and the United States. 

In 2010, Mexican beef exports totaled $288 million, with about one-fi fth of 

these sales going to Japan.

17BSE 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, 2006a).

18A 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, 

2010). In the United States, a total of 3 

animals have been discovered to have 

BSE since May 2003. The most recent 

U.S. discovery (February 2006) was 

an animal of about 10 years of age in 

Alabama (USDA/APHIS, 2008). No 

BSE discoveries have been reported for 

Mexico.

19Detailed summaries of these 

efforts are available in Zahniser and 

Crago (2009) and Zahniser (2007).
30

NAFTA AT 17: Full Implementation Leads To Increased Trade and Integration / WRS-11-01 

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China is the largest potential market outside the NAFTA region for North 

American beef, by virtue of its large population and rapidly growing per 

capita income. In July 2010, Canada and China agreed on the process for 

regained access to the Chinese market for boneless beef obtained from 

animals under 30 months of age and for tallow for industrial use (Lupescu, 

2010: p. 12). The required assessment of the Canadian system has not yet 

been completed by the Chinese, however, so the timeline for the actual 

resumption of trade is uncertain. Technical discussions between the U.S. and 

Chinese Governments about U.S. access to China’s beef market are scheduled 

for 2011 (USDA/OC, 2010), and the Mexican Government also is engaged in 

negotiations for access to the Chinese beef market.

Mexico’s Pork and Beef Sectors Take Greater 

Interest in Asian Markets

U.S. and Canadian beef and pork producers have been active in trade outside 

the NAFTA region for more than half a century, and Mexico’s beef and 

pork producers have done so for the last decade. In 2010, Mexico exported 

about 58,000 metric tons of pork ($275 million) and 72,000 metric tons 

of beef ($288 million) (Secretaría de Economía, as cited by Global Trade 

Information Services, 2011) worldwide. About 90 percent of Mexico’s pork 

exports and 42 percent of its beef exports went to either Japan or South 

Korea, while the remainder went almost entirely to the United States.

The Mexican Government has been instrumental in securing market access 

for Mexico’s pork and beef exports, playing a role similar to that of the 

governments of the United States, Canada, and many other countries on 

behalf of their respective meat sectors. Building upon its access to the 

Japanese and South Korean markets, the Mexican Government is negotiating 

for greater access to the red meat markets of China and Singapore. And, in 

2010, it reached an agreement with Russia to export beef to that country (San 

Juan and Williams, 2010).

Regionalization of Sanitary Standards 

Facilitates Meat Trade

Both NAFTA and the URAA 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 fl ow from regions within a country that are free of dangerous animal 

diseases, even if those diseases are endemic in another part of that country. 

Once an outbreak of a specifi c animal disease is identifi ed, the national 

government of the importing country makes a risk assessment to determine 

if trade restrictions can be defi ned 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 certifi ed by their 

national governments as being eligible to export and may be subject to audits 

by the government of the importing country.20 Such audits sometimes result 

in the decertifi cation of individual meat processing plants, either on a temporary or a permanent basis.

20USDA’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 certifi es and decertifi es establishments that are allowed to participate in 

this trade, and it audits the inspection 

systems of those countries. FSIS’s audit 

reports and lists of foreign establishments are available at: www.fsis.usda.

gov/Regulations_&_Policies/index_

of_certifi ed_countries/index.asp.
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Regionalization has helped to facilitate meat trade within the NAFTA region. 

For example, the defi nition of Canada as a minimal-risk region for BSE by 

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

exports to the United States several years later. Regionalization also has 

enabled U.S. poultry meat exports to Mexico to continue largely uninterrupted in the face of localized outbreaks of low pathogenic avian infl uenza in 

specifi c counties in the State of Arkansas in 2008 (Flores, 2008: p. 11) and in 

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

Williams, 2009).

Mexican authorities also have worked with their U.S. counterparts to regionalize U.S. sanitary standards related to Classical Swine Fever (CSF) and 

Exotic Newcastle Disease (END)—an effort that has fostered modest levels 

of Mexican pork and poultry meat exports to the United States over the past 

decade. In 2010, U.S. imports of poultry meat and pork from Mexico equaled 

about $12 million and $14 million, respectively. As of October 2008, the 

United States recognized nine Mexican States to be free or at low risk of CSF 

and three Mexican States to be free of END (USDA/APHIS, 2008). Mexican 

authorities, however, assert that they have much wider geographic control over 

these two diseases. In January 2009, the Mexican Government declared its 

entire territory to be free of CSF, and as of February 1, 2011, it recognized all 

of Mexico except the Federal District and the States of Mexico and Oaxaca 

to be free of END (SAGARPA/SENASICA, 2011). However, the Mexican 

Government announced several recent detections of END in January and 

March 2011 involving a poultry fattening farm in the State of Baja California, a 

poultry breeding farm in the State of Hidalgo, and a zoo in Acapulco, Guerrero 

(OIE, 2011; Associated Press, 2011). By comparison, the United States 

considers CSF to have been eradicated within the United States and Canada; 

the last outbreak of END in the United States took place during 2002-03.
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Integration of North America’s fruit and vegetable markets has generally been at a high level for a long time. Many aspects of regional 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, 

except for those products covered by the retaliatory tariffs associated with 

the trucking dispute. Food safety and phytosanitary standards continue to be 

issues of concern for produce trade in the NAFTA region.

Fruit and vegetable trade among the NAFTA countries has increased substantially since the agreement’s implementation in 1994, and Mexican growers, 

in particular, have benefi ted from this expansion. Mexican fruit and vegetable 

exports to the United States have more than tripled during the NAFTA 

period, approaching $7.1 billion in 2010. 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 domestic, in-season production was on the market). Some of these 

tariffs were quite high. For example, Mexican asparagus faced a seasonal 

tariff of 25 percent.

U.S. fruit and vegetable exports to Mexico have more than tripled since 

NAFTA’s implementation, equaling about $984 million in 2010. These 

exports have benefi ted from the rapid expansion of Mexico’s supermarket 

sector over the past two decades. Prior to NAFTA, many U.S. producers 

already had procurement relationships with supermarket chains in Mexico, 

and new relations emerged between buyers and suppliers following the 

agreement’s implementation (Tropp et al., 2002: p. ix). Today, high-quality 

transportation services are available to transport perishable products from 

the United States to destinations not only throughout Mexico but also beyond 

Mexico’s southern border into Central America, although there is still room 

to improve the handling of frozen and refrigerated foods (McClellan, 2011). 

Several U.S. supermarket chains currently operate in Mexico. As of March 

2011, Texas-based H-E-B had a total of 32 stores in the States of Coahuila, 

Guanajuato, Nuevo León, San Luis Potosí, and Tamaulipas (Supermercados 

Internacionales H-E-B, 2011), and Wal-Mart de México was operating 1,288 

stores featuring grocery sales (Wal-Mart de México, 2011).

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 between the fruit and vegetable 

markets of the two countries. 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 5). 

U.S. tariffs on Canadian fruit and vegetables were generally small prior to 

CUSTA, with the exception of fresh mushrooms, which faced restrictions 

with an ad valorem tariff equivalent of about 28 percent on a trade-weighted, 

A Highly Integrated Fruit 

 and Vegetable Market
33

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annual basis. U.S. growers have been active in the Canadian market for some 

time, particularly during the winter months. In 2010, U.S. fruit and vegetable 

exports to Canada approached $4.3 billion.

U.S. Dry Bean Exports to Mexico Enter Fourth Year 

Without Tariff and Quota Restrictions

Dry beans are the main commodity among fruit and vegetables for which 

transitional restrictions under NAFTA were eliminated in 2008. For the 

period 1994-2007, NAFTA specifi ed gradually restrictive TRQs for U.S. and 

Canadian exports to Mexico of dry beans belonging to the species Phaseolus 

vulgaris, or “common” beans, for short. Common beans encompass many 

varieties, including black, pinto, kidney, navy, Great Northern, small white, 

pink, cranberry, and small red beans. Under NAFTA, U.S. dry beans have 

become a larger and steadier portion of Mexico’s dry bean supply. Still, U.S. 

dry bean exports to Mexico continue to fl uctuate because Mexican production 

varies based on the weather (fi g. 8). In marketing year 2009/10 (September 

2009 to August 2010), U.S. exports of dry common beans to Mexico equaled 

about 143,000 metric tons, compared with an annual average of 72,000 

metric tons during marketing years 2002/03 to 2006/07 (the last 5 marketing 

years completely subject to the TRQ).21

Importance of Imports to U.S. Food 

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 

21A recent ERS report co-authored 

with investigators from the Mexican 

agricultural secretariat (Zahniser et 

al., 2010) examines the outlook for 

the U.S. and Mexican dry bean sectors after the completion of NAFTA’s 

transition to free regional trade in dry 

beans.

Figure 8

U.S. dry beans make up a larger and steadier portion 

of Mexican supply

Exports in metric tons (thousands)

Note: The production statistics in 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 2009 agricultural year covers the crops planted from October 2008 to March 2009 

(fall/winter 2008/09) and from April to September 2009 (spring/summer 2009). 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, the U.S. marketing year 2009/10 is matched 

with Mexico’s 2009 agricultural year. This allows 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 calculations based on data from USDA/FAS 

(2011a) and SAGARPA/SIAP (2011a).

Production in metric tons (thousands)

1983/84 86/87 89/90 92/93 95/96 98/99 01/02 04/05 07/08

0

20

40

60

80

100

120

140

160

180

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

U.S. exports to Mexico (left axis)

Mexican production (right axis)

U.S. marketing year (September - August)
34

NAFTA AT 17: Full Implementation Leads To Increased Trade and Integration / WRS-11-01 

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share of the U.S. food supply. In 2008, Mexico and Canada supplied about 

12 percent of the fresh or frozen fruit available in the United States and 15 

percent of the available fresh or frozen vegetables. In 1990, these shares each 

equaled 6 percent. 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 2008, fresh produce accounted for 49 percent of the U.S. fruit and 

vegetable supply (excluding juice), up from 45 percent in 1990.22

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 limes, 

fresh mangos, fresh papayas, fresh asparagus, bell peppers, broccoli and 

caulifl ower 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.

22The statistics in this paragraph 

were calculated using U.S. per capita 

food availability data from USDA/

ERS (2010), and import data from U.S. 

Department of Commerce, Census Bureau, Foreign Trade Statistics, as cited 

by USDA/FAS (2011).

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

1991-93 2007-09 1991-93 2007-09 1991-93 2007-09

Average, 

1991-93

Average, 

2007-09

————————— Percent ————————— —— Kilograms ——

Selected fruit:

 Grapes, fresh1 15 24 4 8 -13 -8 3.4 3.7

 Limes, fresh1 66 100 82 98 -3 0 0.4 1.1

 Mangos, fresh2 92 100 85 65 -2 0 0.4 0.9

 Papayas, fresh 8 91 27 59 -9 -2 0.1 0.5

 Strawberries, fresh -8 -5 2 7 -9 -11 1.6 3.0

 Watermelon 1 16 5 13 -5 -7 6.3 6.8

Selected vegetables:

 Asparagus, fresh 12 79 30 20 -13 -2 0.3 0.6

 Bell peppers 5 45 13 20 -9 1 2.5 4.3

 Broccoli and caulifl ower, processing3 66 90 45 47 0 0 1.4 1.4

 Chile peppers 35 76 16 45 -3 -2 2.3 2.8

 Cucumbers, fresh 28 54 31 40 -6 3 2.2 2.9

 Onions, fresh -20 3 7 4 -4 -2 7.4 9.3

 Squash4 23 48 19 41 -1 -1 1.7 1.9

 Tomatoes, fresh 9 36 16 36 -7 0 7.1 8.6

1For these commodities, marketing years 1990/91, 1991/92, and 1992/93 are compared with marketing years 2006/07, 2007/08, and 2008/09.

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.

Source: Author presentation of data from Lucier and Glaser (2010); Perez, Dohlman, and Plattner (2010); and USDA, Foreign Agricultural 

Service (2011a) (trade data).
35

NAFTA AT 17: Full Implementation Leads To Increased Trade and Integration / WRS-11-01 

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President Obama Signs the FDA Food Safety 

Modernization Act

In January 2011, President Obama signed into law the FDA Food Safety 

Modernization Act (FSMA), which makes a number of signifi cant 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.23 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 scientifi c principles, do not discriminate among the 

NAFTA partners, and are not trade restrictions in disguise.

The FSMA contains many provisions that are likely to affect U.S. agricultural trade with Canada and Mexico, four of which are discussed here. 

First, not later than 1 year after the FSMA’s enactment, the FDA is required 

to publish a notice of proposed rule-making to establish science-based 

minimum standards for the safe production and harvesting of those types of 

raw fruit and vegetables for which the FDA determines that such standards 

minimize the risk of serious adverse health consequences or death. The FDA 

is then required to adopt a fi nal regulation to provide for minimum sciencebased standards for those fruit and vegetables. At times, the NAFTA governments and private-industry groups have adopted mandatory good agricultural 

practices (GAPs) in the fi eld and good manufacturing practices (GMPs) in 

packing facilities as a way to address outbreaks of foodborne illnesses related 

to cross-border produce trade. Mexico’s SENASICA applied this approach 

to green onions at the behest of Mexican growers following the outbreaks of 

foodborne illness associated with green onions in 2003 (Calvin et al., 2004). 

A similar approach was instituted in 2005 following Salmonella outbreaks 

associated with Mexican cantaloupe in 2000, 2001, and 2002 (SAGARPA/

SENASICA, 2008; FDA, 2008; and Green et al., 2006).24

Second, the FSMA requires the FDA to target inspection resources by identifying high-risk facilities and allocate resources to the inspection of facilities and at ports of entry according to known safety risks. The term “facility” 

means a domestic facility or a foreign facility that is required to register under 

section 415 of the Federal Food, Drug, and Cosmetic Act. Risk factors specifi ed 

by the FSMA for 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 specifi ed for allocation of resources to inspect 

any article of food imported into the United States at ports of entry 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 verifi cation program, and the importer’s participation, or lack thereof, 

in the voluntary qualifi ed importer program.

Third, the 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 fi rst 5 years of the Act and at least once 

23The FDA is the Federal agency 

responsible for the safety of all food 

products, except for meat, poultry, and 

some aspects of eggs, which are the 

domain of USDA’s Food Safety and 

Inspection Service.

24U.S. cantaloupe imports from 

Mexico have been slow to return to 

their previous levels, as Mexican 

growers either concentrated on their 

domestic market or shifted to other 

crops. In 2010, U.S. cantaloupe imports 

from Mexico equaled about 28,000 

metric tons, compared with 197,000 

metric tons in 1999.
36

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during each 3-year period that follows. Domestic facilities not deemed to 

be of high risk must be inspected at least once during the fi rst 7 years of the 

Act and at least once during each 5-year period that follows. With respect 

to foreign facilities, the FSMA requires the FDA to inspect not fewer than 

600 facilities during the fi rst 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 order to work more closely with foreign regulatory authorities, the FDA has already positioned staff in about a dozen foreign locations, 

including a post in Mexico City opened in 2009 as part of its Latin American 

Offi ce (FDA, 2009).

Fourth, to avoid placing an undue burden on smaller farms and food 

producers, the FSMA provides an exemption for direct farm marketing from 

some of its new provisions and implementing regulations. To qualify for this 

exemption in a given calendar year, a farm must meet both of the following 

conditions: (1) during the previous 3-year period, the average annual monetary value of the food sold by such farm directly to qualifi ed end-users during 

such period exceeded the average annual monetary value of the food sold by 

such farm to all other buyers during such period; and (2) the average annual 

monetary value of all food sold during such period was less than $500,000, 

adjusted for infl ation. The term “qualifi ed end-users” with respect to a food is 

defi ned by the FSMA to mean (1) the consumer of the food; or (2) a restaurants or retail food establishment located in the same State as the farm or not 

more than 275 miles from the farm.

The Search for Risk-Mitigating Tools for Regional 

Produce Trade Continues

In 1999, a group of produce and transportation companies from each NAFTA 

country formed the Fruit and Vegetable Dispute Resolution Corporation 

(DRC), a private, nonprofi t organization whose mission is “to provide the 

North American produce trade with harmonized standards, procedures and 

services necessary to avoid and resolve commercial disputes in a timely, 

cost-effective manner” (DRC, 2010b).25 The original concept of a North 

American dispute resolution mechanism for regional produce trade was 

inspired by the Perishable Agricultural Commodities Act (PACA) of 1930, 

which was enacted to promote fair trading practices in the U.S. fruit and 

vegetable industry. Under PACA, sellers must ship the quantity and quality of 

produce specifi ed in their contracts, and buyers must accept shipments that 

meet contract specifi cations.

One of the DRC’s major achievements is a multistep dispute resolution system 

that begins with preventative activities and cooperative problem-solving and 

then proceeds gradually to more binding measures. In addition, the DRC 

offers assistance to its members on a fee-for-service basis in disputes with 

nonmembers (DRC, 2008). Gómez and Rizwan (2010) fi nd that the DRC has 

facilitated produce transactions within the NAFTA region and has 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 defi ciencies. According to Gómez and Rizwan, 

the DRC addressed 1,285 disputes from 2000 to 2010 involving produce 

with a total nominal value of nearly $32 million. About 60 percent of these 

25The DRC was established in 

response to Article 707 of NAFTA, 

which called for an advisory committee on private commercial disputes 

regarding agricultural goods.
37

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disputes stemmed from differences between the buyer and seller about the 

quality of the delivered produce.

U.S. and Canadian fi rms 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 offi ce in Mexico, 

citing the country’s lack of infrastructure for destination inspection and 

limited interest among Mexican wholesalers and retailers (DRC, 2007). This 

low level of interest may also refl ect the relative size of U.S. fresh or frozen 

fruit and vegetable exports to Mexico, which averaged about $619 million 

per year during 2008-10, compared with an annual average of $5.6 billion of 

corresponding imports from Mexico.

Even with the DRC in place, Canada still does not have a statute that effectively protects produce suppliers from buyers that default on their payment 

obligations. In contrast, Canadian suppliers to U.S. fi rms are protected 

by the PACA Trust provisions. In March 2010, the Canadian Government 

established a Federal-Provincial task force to assess the extent of payment 

problems in the Canadian produce industry and to explore options for risk 

mitigation tools in the Canadian marketplace. Recommendations on possible 

tools are expected by mid-2011. The task force was created in response to 

requests from the U.S. and Canadian private sectors as well as from the U.S. 

Government. The North American Trade Committee (NATC), a trilateral 

entity made up of industry organization representatives from each NAFTA 

country, has expressed support for the creation of fi nancial risk mitigation 

provisions in Canada similar to the mechanisms available under the PACA 

Trust (North American Trade Committee, 2011).
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Integration of the U.S. and Mexican markets for sugar and other sweeteners 

has reached a high level, following the start of bilateral free trade in these 

products in fi scal year (FY) 2008. The foundation for this development was 

laid in 2006, when the U.S. and Mexican Governments settled a protracted 

dispute about how to implement NAFTA’s provisions for sugar and sweeteners. Since then, trade in sugar and fructose between the two countries has 

increased signifi cantly (fi g. 9). Imports from Mexico accounted for about 8 

percent of the U.S. sugar supply during FYs 2008-10, compared with a negligible share prior to NAFTA.26 Meanwhile, high-fructose corn syrup (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 2010, Mexico’s per capita domestic 

sweetener use included an estimated 13 kilograms of HFCS, compared with 

23 kilograms for the United States (Haley and McConnell, 2010: p. 13). 

The high cost of sugar relative to HFCS is an important driver of increased 

Mexican use of HFCS. By contrast, integration of the U.S. and Canadian 

sugar markets remains at a low level because CUSTA exempted U.S.-Canada 

sugar trade from the process of regional trade liberalization. Nevertheless, 

the U.S. and Canadian markets for processed foods are highly integrated, and 

many processed foods traded between the two countries contain sweeteners 

(app. tables 4-5).

Access to the integrated U.S.-Mexico sugar market by other countries has 

two control points—one in Washington, DC, and one in Mexico City—as 

both the U.S. and Mexican Governments have the option of announcing 

sugar import quotas beyond the minimum amounts required by their multilateral commitments at the WTO and their free-trade agreements other than 

NAFTA. Since FY 2008, USDA has twice increased the raw sugar TRQ 

26The fi gure of 8 percent is calculating using the import and domestic use 

data in Haley (2011a).

Integration of U.S.-Mexico Sugar and 

 Sweetener Markets Reaches High Level

Figure 9

Resolution of the U.S.-Mexico sugar and sweetener dispute 

has allowed for substantial trade in sugar and fructose

1,000 metric tons

Fructose is defined to include high-fructose corn syrup (HFCS) and crystalline fructose.

Source: USDA, Economic Research Service using data from USDA/FAS (2011a) 

(sugar imports) and Haley (2011b) (fructose exports).

Fiscal year

1996 97 98 99 2000 01 02 03 04 05 06 07 08 09 10

0

200

400

600

800

1,000

1,200

1,400

Fructose exports to Mexico

Sugar imports from Mexico
39

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beyond the United States’ international commitments—in April and July 

2010. Meanwhile, the Mexican Government’s recent practice has been to 

pursue a less restrictive sugar import policy than required by its international obligations, with the expressed intention of assuring an affordable 

domestic supply. For calendar year 2010, Mexico announced duty-free 

import quotas for sugar totaling 350,000 metric tons. In contrast, Mexico’s 

minimum WTO quota for sugar and sugar-containing products is 183,800 

metric tons, subject to a 50-percent tariff. Because of NAFTA’s rules of 

origin, sugar traded between the United States and Mexico must originate in one of the two countries to qualify for duty-free status. It would be 

possible for Mexico to export more of its domestic sugar production to the 

United States by consuming more sugar imported from non-NAFTA countries, but this would come at the risk of depressing the prices received by 

Mexican sugar producers and exporters.

Resolution of Chapter 11 Cases 

on Mexico’s HFCS Tax

The World Bank’s International Centre for Settlement of Investment 

Disputes (ICSID) has resolved one of the last remaining issues associated 

with the U.S.-Mexico sugar and sweetener dispute, the validity of a sales tax 

formerly levied by the Mexican Government on soft drinks and other beverages containing any sweetener other than cane sugar. In November 2007, 

August 2009, and September 2009, ICSID arbitral panels rendered awards 

in three separate cases to U.S. fi rms that had contested the tax. These challenges took place in accordance with procedures outlined in Chapter 11 of 

NAFTA, which governs the treatment of investors by member countries, and 

as a group, required more than 5 years to adjudicate. The awards in these 

cases are reportedly quite large, refl ecting the potential size of the sweetener 

market in Mexico: $33.5 million plus interest to be shared by Archer Daniels 

Midland Company and Tate and Lyle Ingredients Americas, Ltd. (World 

Bank/ICSID, 2011), a reported $58.4 million to Corn Products International, 

and a reported $77.3 million to Cargill, Incorporated (Frankel, 2009).27 27Details about these cases are available on the ICSID website (http://icsid.

worldbank.org), although the decisions 

and awards for each case have not yet 

been published.
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NAFTA AT 17: Full Implementation Leads To Increased Trade and Integration / WRS-11-01 

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North America’s cotton, textile, and apparel markets became highly integrated during NAFTA’s fi rst decade, as a pattern of specialization emerged 

in which the United States supplies raw cotton and some intermediate inputs 

to Mexican textile and apparel producers and Mexico exports some of its 

textile and apparel output to the United States. This pattern still persists, 

but to a much lesser extent because of the WTO’s Agreement on Textiles 

and Clothing. This multilateral trade agreement gave China, Vietnam, 

Pakistan, India, and other non-NAFTA countries 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.

Since 2000, U.S. cotton exports to Mexico have declined at a slower rate 

than U.S.-Mexico trade in cotton textiles (fi g. 10), while Honduras, a member 

country of the Central America-Dominican Republic-United States Free 

Trade Agreement (CAFTA-DR), has surpassed Mexico as the leading destination for U.S. exports of cotton textiles. Four other CAFTA-DR countries—

the Dominican Republic, El Salvador, Guatemala, and Nicaragua—are in 

the third and fourth, sixth, and seventh positions.28 This suggests that some 

of the U.S. partnerships with Mexican textile and apparel manufacturers 

have shifted to the CAFTA-DR region, even though Mexico’s remaining 

textile and apparel fi rms continue to rely on U.S. cotton. Meanwhile, China, 

Pakistan, and India have surpassed Mexico as suppliers of cotton textiles to 

the United States. Canada is no longer among the leading exporters of cotton 

textiles to the United States and has largely shifted away from the importation and milling of cotton.

28Costa Rica, the other member 

country of CAFTA-DR, was the 

20th-leading destination of U.S. cotton 

textile exports in 2009.

Multilateral Trade Liberalization Reshapes 

 the Cotton, Textile, and Apparel Markets

Figure 10

U.S. cotton exports to Mexico are declining at a slower rate than 

bilateral trade in cotton textiles

Thousand metric tons

Source: USDA, Economic Research Service using data from USDOC/Census Bureau 

(2010) (textile trade) and USDA/FAS (2011a) (cotton exports).

1990 92 94 96 98 2000 02 04 06 08

0

100

200

300

400

500

600

700 Cotton textile exports to Mexico

Cotton textile imports from Mexico

U.S. cotton exports to Mexico
41

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The implementation periods established by NAFTA have expired, and the 

task of eliminating duties and quantitative restrictions as specifi ed by the 

agreement has been completed. While NAFTA created a number of mechanisms to promote further integration, as described below, the agreement 

does not contain broad policy directives calling for greater integration once 

regional trade liberalization has been achieved. Thus, the NAFTA governments are working within the existing framework of the free-trade area as 

they strive to increase the fl uidity of cross-border economic activity—an 

approach that they have pursued throughout NAFTA’s existence.29

For instance, the NAFTA governments have long been aware of the importance of regulatory coordination to agricultural trade, and they have fi netuned many of their sanitary, phytosanitary, and other regulatory measures in 

ways that have increased opportunities for new trade. In April 2010, USDA’s 

FSIS and SAGARPA’s SENASICA announced the signing of a “terms of 

reference” document that focuses on ensuring food safety and protecting 

public health in both the United States and Mexico. This document outlines 

matters of equivalence, audit procedures, eligibility for exporting establishments, and communication channels between the two agencies (USDA/FSIS, 

2010). Other examples over the past 17 years include phytosanitary rules 

that allow for fresh Hass avocados to be imported from Mexico, the coordinated campaign by all three countries to seek a harmonized approach to 

mitigating the risks associated with BSE, and the sharing of scientifi c studies 

and administrative evaluations among pesticide regulators and scientists 

(Green et al., 2006). Many of these efforts have taken place within formal 

organizational structures such as the NAFTA Committee on Sanitary and 

Phytosanitary Measures, while others have occurred at the working level 

between NAFTA governments.30

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 qualifi es for its preferential tariff, which in NAFTA’s case is usually duty-free status. Since 2003, 

the NAFTA Working Group on Rules of Origin (WGRO) has developed four 

rounds of liberalizing changes to the accord’s rules of origin that have been 

implemented by the NAFTA governments. Some of these changes directly 

apply to agriculture. For instance, modifi cations issued in 2009 allow 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). In January 2011, 

the NAFTA Free Trade Commission instructed the WGRO to begin implementation of the fourth round of changes to the agreement’s rules of origin 

and to consider the possibility of a fi fth round (USTR, 2011a).

One aspect of the NAFTA relationship that might change in the future is the 

set of activities fostered by the labor agreement that accompanied NAFTA—

the North American Agreement on Labor Cooperation (NAALC).31

Discussions have taken place among the NAFTA governments about how 

to improve the NAALC’s implementation. Effective August 20, 2010, the 

29Actions that would build upon 

NAFTA are sometimes referred to as 

“NAFTA Plus.” Meilke, Rude, and 

Zahniser (2009) examine this subject 

in greater detail.

30From 2005 to 2009, the NAFTA 

governments channeled some of their 

efforts toward regulatory coordination 

through the Security and Prosperity 

Partnership (SPP), a trilateral effort 

intended to increase the security and 

enhance the prosperity of the NAFTA 

countries through greater cooperation 

and information sharing. The SPP, 

however, is no longer being utilized as 

a structure for such activities.

31The NAALC’s website (www.

naalc.org) provides information about 

the organization’s activities.

What Does North America’s Future Hold?
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NAFTA AT 17: Full Implementation Leads To Increased Trade and Integration / WRS-11-01 

Economic Research Service/USDA

Washington, DC, offi ces of the Secretariat of the Commission for Labor 

Cooperation, the international organization created by the NAALC, were 

temporarily closed, and the U.S. and Mexican labor secretaries and the 

Canadian labor minister have directed the three National Administrative 

Offi ces of the NAALC “to provide a report not later than February 21, 2011, 

with recommendations as to the form and nature of the operations of the 

Secretariat” (Secretariat of the Commission for Labor, 2010).

The functioning of the North American free-trade area will also be affected 

by policy responses to issues that are completely separate from NAFTA. Two 

agriculture-related examples are border security and immigration. Complying 

with border security requirements sometimes creates challenges for companies participating in regional agricultural trade. In a survey of 80 major 

Canadian fi rms that export food to the United States, Murata (2010) discovered that about 70 of them encountered compliance costs associated with 

modifi cations and enhancements to security measures following the events of 

September 11, 2001, and that 17 of the fi rms were unable to provide the same 

level of customer service as before. Despite these challenges, 60 of the fi rms 

indicated that their exports to the United States had increased during the fi rst 

decade of the 21st century. In the context of heightened security concerns 

over the last several years along the U.S.-Mexico border, USDA’s APHIS and 

Mexico’s SENASICA have made temporary changes to the locations and 

hours of operation of inspection points for the importation of live animals 

into the United States (Williams, 2010; Lozano and Williams, 2010).

Efforts to improve the functioning of border institutions are sometimes 

constrained by concerns about national sovereignty. For example, in 2007, the 

U.S. and Canadian Governments ended several years of negotiations about 

moving the U.S. border inspection facility located on the Buffalo, NY, side 

of the Peace Bridge to a more spacious location on the Canadian side of the 

bridge because a number of issues related to national sovereignty could not be 

resolved (USGAO, 2008: p. 4). The Buffalo, NY, Customs District accounted 

for 16 percent of U.S. agricultural imports from Canada in 2009.

In the area of immigration, broader opportunities for foreign-born workers to 

work legally in U.S. agriculture could help to assure the availability of labor 

for the sector while offering potential migrants an alternative to entering 

the United States illegally, an activity that is fraught with many dangers. 

In 2010, the number of hired laborers employed by U.S. agriculture ranged 

from 612,000 in January to 885,000 in July, according to quarterly estimates 

(USDA/NASS 2011). Certain labor-intensive sectors of U.S. agriculture, such 

as horticultural production, rely heavily on foreign-born workers, and roughly 

half of the hired labor force in U.S. crop agriculture is believed to be undocumented (Carroll et al., 2009).

The Federal Government already operates a program for foreign-born farm 

workers who are not permanent residents of the United States called the 

H-2A Temporary Agricultural Worker Program. Its participation levels are 

small relative to the number of unauthorized immigrants working in U.S. 

agriculture; in FY 2009, the U.S. Department of Labor (USDOL) certifi ed 

86,014 positions for the H-2A program (USDOL/ETA, 2010: p. 30). 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 by agricultural employers. 
43

NAFTA AT 17: Full Implementation Leads To Increased Trade and Integration / WRS-11-01 

Economic Research Service/USDA

Since the H-2A 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, such as 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.

Where Are North America’s 

New Agricultural Markets?

Each NAFTA country is seeking more open trading relationships with nonNAFTA countries as it searches for new markets for its agricultural and nonagricultural products. Currently, all three NAFTA governments are negotiating 

additional regional and bilateral trade agreements—thereby building upon 

their extensive network of existing agreements—and participating in the Doha 

Development Round of multilateral trade negotiations at the WTO. For the 

United States, one of the main regional initiatives underway is the Trans-Pacifi c 

Partnership (TPP), an effort to foster greater economic integration in the AsiaPacifi c Region that currently engages eight other “like-minded” countries: 

Australia, Brunei Darussalam, Chile, Malaysia, New Zealand, Peru, Singapore, 

and Vietnam (USTR, 2011b). In addition, three trade agreements signed by 

the United States with Colombia, Panama, and South Korea have not yet been 

submitted to the U.S. Congress for its approval.

This interest in markets outside the NAFTA region refl ects both the tremendous progress that has been made toward removing trade barriers within the 

NAFTA region and the degree to which changes in the world’s demographics 

and economics have altered the NAFTA region’s relative importance. 

According to the U.S. Census Bureau’s International Database, the world’s 

population is projected to grow from 6.9 billion to 8.3 billion over the next 

20 years (2011-31), with 93 percent of the total increase corresponding to 

non-NAFTA countries. Two regions are expected to account for a combined 

79 percent of the projected increase: (1) Asia (excluding the Near East), due 

to the large size of its current population, and (2) Sub-Saharan Africa, due 

to its fast rate of projected population growth.32 In addition, several Asian 

countries are projected to have average annual growth rates in real per capita 

income in excess of 5 percent over the next 20 years, well above the average 

rates projected for the United States (1.77 percent), Canada (1.65 percent), and 

Mexico (2.08 percent) (USDA/ERS, 2010). For these reasons, agricultural 

producers in North America should be expected to increase their efforts to 

serve markets outside the NAFTA region. 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 nonNAFTA countries exemplify this trend.

Still, the projections also indicate that the NAFTA region will 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 Canada and Mexico (fi g. 11). Between 2011 and 2031, the 

region’s population is projected to increase by about 91 million—63 million 

32See the USDOC/Census Bureau 

(2010) for a list of the countries defi ned 

as part of these regions.
44

NAFTA AT 17: Full Implementation Leads To Increased Trade and Integration / WRS-11-01 

Economic Research Service/USDA

in the United States, 22 million in Mexico, and 5 million in Canada.33

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 

CUSTA and NAFTA.

Population growth rates in each NAFTA country are projected to decelerate over the next 20 years (table 6). For Canada, this deceleration will be 

particularly sharp and will place that country alongside the European Union 

as one the world’s few major agricultural exporters that will have little to 

no population growth in the coming decades. As a result, the importance 

of exports to Canada’s agricultural sector will become even stronger, as 

Canada’s ability to generate exportable surpluses of agricultural products 

will be somewhat enhanced.

As population growth slows, the population of each NAFTA country will 

age. Among the NAFTA countries, Mexico is projected to have the largest 

increase in median age of population over the next two decades—from 27 

years in 2011 to 34 years in 2031 (table 6). This aging of Mexico’s population is likely to have ramifi cations throughout the Mexican economy, many 

of which are relevant to food demand. In a study of Mexico’s demographic 

trends, Jackson (2005) notes that the number of dependents (children plus 

persons over age 65) per 100 working-age adults in Mexico is projected to 

decline from the current level of roughly 80 to a record low of 65 in 2030 and 

then start to increase as Mexicans retire in larger numbers. According to the 

same study, this demographic dividend, albeit brief, may diminish pressures 

on social service budgets, facilitate higher savings rates and larger investments in education, foster a shift toward more capital-intensive economic 

activities, and decrease the “push” factors behind international migration—

all factors that could lead to higher rates of economic growth. This, in turn, 

could lead to higher levels of food spending per person, as such spending 

tends to rise with household income within countries and with per capita 

income across countries (Frazão et al., 2008).

33The individual numbers for the 

United States, Canada, and Mexico add 

up to 90 million due to rounding.

Figure 11

The total population of the NAFTA region is projected to increase 

by 91 million over the next two decades

Millions of persons

Source: USDA, Economic Research Service using USDOC/Census Bureau (2010).

2011 2021 2031

0

100

200

300

400

500

Canada Mexico United States
45

NAFTA AT 17: Full Implementation Leads To Increased Trade and Integration / WRS-11-01 

Economic Research Service/USDA

George Earle Buckle, editor of The Times (of London) newspaper during 

the late 19th and early 20th centuries, once wrote: “To simplify complications is the fi rst essential of success.” Over the past two decades, CUSTA 

and NAFTA simplifi ed numerous complications by removing thousands of 

tariffs, quotas, import licensing requirements, and other policy measures 

that formerly distorted agricultural trade among the United States, Canada, 

and Mexico. These actions facilitated a dramatic increase in cross-border 

economic activity in which each NAFTA country participated, as economic 

agents (i.e., producers, intermediaries, and consumers) throughout the 

region responded more effi ciently to market signals. While greater clarity in 

economic signaling in itself does not provide answers to the region’s future 

challenges, it can provide a setting for better decisionmaking and, one hopes, 

the foundation for greater prosperity.

Table 6

Many demographic changes are expected in the NAFTA region 

over the next 20 years

Country

Total midyear

population

Annual population 

growth rate

Median age, 

midyear

2011 2021 2031 2011 2021 2031 2011 2021 2031

Millions Percent Years

United States 313 345 377 0.96 0.93 0.85 36.9 37.8 38.8

Canada 34 37 39 0.79 0.67 0.46 41.0 42.9 44.5

Mexico 114 126 136 1.10 0.90 0.66 27.1 30.6 34.2

Source: USDA, Economic Research Service using data from USDOC/Census Bureau 2010).
46

NAFTA AT 17: Full Implementation Leads To Increased Trade and Integration / WRS-11-01 

Economic Research Service/USDA

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Appendix table 1

Many of the largest components of U.S. agricultural trade with the NAFTA countries decreased between 

2008 and 2009

Country

Value Volume Unit value

2008 2009 Change 2008 2009 Change 2008 2009 Change

Million dollars Percent

1,000 

metric tons Percent

Dollars per 

kilogram Percent

U.S. agricultural exports to Canada 16,253 15,725 -3 -- -- -- -- -- --

Beef and veal 698 622 -11 142 131 -8 4.92 4.76 -3

Pork 539 501 -7 161 154 -4 3.36 3.25 -3

Dog or cat food, retail sale 494 485 -2 354 294 -17 1.40 1.65 18

Lettuce, fresh 379 399 5 306 287 -6 1.24 1.39 12

Pastry, cake, bread, and pudding 356 364 2 143 145 2 2.50 2.51 0

Corn 506 303 -40 2,628 1,900 -28 0.19 0.16 -17

Prepared food from swelling or roasting

 of cereal or cereal products

209 271 30 102 126 23 2.05 2.16 6

Strawberries, fresh 252 270 7 97 105 9 2.74 2.67 -2

Orange juice 264 263 0 284 253 -11 0.93 1.04 12

Chickens, fresh or frozen 242 254 5 114 113 -1 2.12 2.25 6

Other 12,315 11,993 -3 -- -- -- -- -- --

U.S. agricultural imports from Canada 18,009 14,710 -18 -- -- -- -- -- --

Rapeseed oil 1,391 926 -33 1,081 1,009 -7 1.29 0.92 -29

Cattle and calves 1,463 918 -37 1,581 1,061 -33 924.90 864.90 -6

Beef and veal 893 780 -13 287 278 -3 3.11 2.81 -10

Pork 724 677 -7 280 296 6 2.58 2.28 -11

Wheat 1,036 647 -38 2,377 2,322 -2 0.44 0.28 -36

Potatoes, frozen 650 647 -1 775 748 -4 0.84 0.86 3

Swine 482 295 -39 9,348 6,365 -32 51.60 46.40 -10

Sweet biscuits, waffl es, and wafers, not frozen 388 290 -25 104 78 -24 3.75 3.71 -1

Confectionery products, except chewing gum 338 314 -7 130 129 0 1.19 1.11 -7

Rapeseed 493 219 -55 963 567 -41 0.51 0.39 -24

Other 10,151 8,997 -11 -- -- -- -- -- --

U.S. agricultural exports to Mexico 15,508 12,932 -17 -- -- -- -- -- --

Corn 2,289 1,362 -41 9,153 7,160 -22 0.25 0.19 -24

Soybeans 1,784 1,348 -24 3,550 3,281 -8 0.50 0.41 -18

Beef and veal 872 743 -15 242 201 -17 3.60 3.70 3

Pork 458 542 18 249 332 33 1.84 1.63 -11

Soybean meal 557 524 -6 1,447 1,323 -9 0.38 0.40 3

Wheat 1,028 478 -53 2,804 1,921 -31 0.37 0.25 -32

Sorghum 349 419 20 1,549 2,451 58 0.23 0.17 -24

Cotton 475 397 -16 298 293 -2 1.60 1.36 -15

Rice 353 343 -3 778 826 6 0.45 0.42 -8

Nonfat dry milk 452 244 -46 133 114 -14 3.41 2.14 -37

Other 6,891 6,533 -5 -- -- -- -- -- --

—continued
60

NAFTA AT 17: Full Implementation Leads To Increased Trade and Integration / WRS-11-01 

Economic Research Service/USDA

Appendix table 1

Many of the largest components of U.S. agricultural trade with the NAFTA countries decreased between 

2008 and 2009—Continued

Country

Value Volume Unit value

2008 2009 Change 2008 2009 Change 2008 2009 Change

Million dollars Percent

1,000 

metric tons Percent

Dollars per 

kilogram Percent

U.S. agricultural imports from Mexico 10,907 11,373 4 -- -- -- -- -- --

Beer 1,567 1,520 -3 1,585 1,521 -4 0.99 1.00 1

Tomatoes, fresh 1,143 1,126 -2 988 1,047 6 1.16 1.08 -7

Avocados, fresh or dried 497 574 16 235 301 28 2.12 1.91 -10

Peppers, fresh 566 509 -10 525 541 3 1.08 0.94 -13

Sugar, cane or beet 407 509 25 920 1,019 11 0.44 0.50 13

Cattle and calves 298 381 28 703 941 34 424.50 405.00 -5

Confectionery products 356 350 -2 218 190 -13 1.63 1.84 13

Biscuits and wafers 315 326 3 145 146 1 2.18 2.24 3

Grapes, fresh 225 286 27 134 114 -15 1.67 2.51 50

Cucumbers, fresh 248 238 -4 411 448 9 0.60 0.53 -12

Other 5,284 5,554 5 -- -- -- -- -- --

-- = not available.

Source: USDA, Economic Research Service using data from USDOC, Census Bureau, Foreign Trade Statistics, as cited by 

USDA/FAS (2011a).
61

NAFTA AT 17: Full Implementation Leads To Increased Trade and Integration / WRS-11-01 

Economic Research Service/USDA

Appendix table 2

Selected U.S. agricultural exports to Mexico, 1991-93 versus 2008-10

Value Volume Unit value

Annual average

Change

Annual average

Change

Annual average

Change

1991-93 2008-10 1991-93 2008-10 1991-93 2008-10

Million dollars Percent

1,000 

metric tons Percent

Dollars per 

kilogram Percent

Total 3,475 14,339 313 -- -- -- -- -- --

Animals and animal products 1,183 3,864 227 -- -- -- -- -- --

Beef and veal 171 755 342 58 201 247 2.97 3.75 26

Beef variety meats 48 147 207 41 81 97 1.18 1.82 55

Pork 68 591 770 32 322 905 2.15 1.84 -14

Pork variety meats 46 152 230 62 131 111 0.73 1.16 59

Nonfat dry milk 55 343 523 33 124 275 1.64 2.77 69

Chickens, fresh or frozen 68 294 332 74 364 392 0.92 0.81 -12

Tallow, inedible 41 237 479 113 328 191 0.36 0.72 98

Turkeys, fresh or frozen 66 236 257 46 133 189 1.42 1.77 25

Cheese 14 164 1,031 5 42 669 2.62 3.90 49

Whey, fl uid or dried 12 124 927 -- -- -- -- -- --

Flours, meals, and pellets of meat or meat

 offal, unfi t for human consumption, and 

 greaves (cracklings)

18 59 222 66 104 57 0.28 0.57 106

Bovine hides, whole1 110 59 -46 2,415 1,355 -44 45.43 44.00 -3

Tallow, edible 33 54 66 89 72 -19 0.37 0.75 105

Cattle and calves2 115 36 -69 179 29 -84 680.57 1,225.00 80

Other 318 612 93 -- -- -- -- -- --

Grains and feeds 897 4,187 367 6,507 16,147 148 0.14 0.26 88

Corn 104 1,732 1,566 914 8,068 783 0.12 0.22 85

Brewers’ or distillers’ dregs and waste 2 263 14,847 15 1,431 9,508 0.11 0.18 64

Cracked corn 13 47 261 68 173 155 0.22 0.27 25

Wheat, unmilled 78 692 787 563 2,387 324 0.14 0.29 110

Sorghum 427 393 -8 3,949 2,092 -47 0.11 0.19 74

Rice 42 336 701 175 807 361 0.25 0.42 69

Malt, not roasted 13 182 1,336 59 314 434 0.28 0.58 106

Mixed feeds or mixed feed ingredients,

 excluding pet foods

37 70 88 179 77 -57 0.21 0.91 336

Dog or cat food, for retail sale 5 47 820 6 41 553 0.81 1.13 40

Other 176 425 141 -- -- -- -- -- --

Fruits and preparations, excluding juice 81 445 448 143 433 203 0.57 1.03 80

Apples, fresh 34 202 495 68 212 212 0.52 0.96 85

Pears, fresh 17 56 233 33 62 88 0.51 0.90 77

Other 30 187 513 -- -- -- -- -- --

Nuts and preparations 33 180 438 22 66 199 1.51 2.72 80

Vegetables and preparations 96 517 440 -- -- -- -- -- --

Dry common beans 15 102 568 26 140 434 0.58 0.73 25

Potatoes, frozen 7 60 806 10 64 549 0.69 0.93 35

Tomatoes, fresh 8 63 685 14 43 216 0.58 1.46 151

Other 66 292 343 -- -- -- -- -- --

—continued
62

NAFTA AT 17: Full Implementation Leads To Increased Trade and Integration / WRS-11-01 

Economic Research Service/USDA

Appendix table 2

Selected U.S. agricultural exports to Mexico, 1991-93 versus 2008-10—Continued

Value Volume Unit value

Annual average

Change

Annual average

Change

Annual average

Change

1991-93 2008-10 1991-93 2008-10 1991-93 2008-10

Million dollars Percent

1,000 

metric tons Percent

Dollars per 

kilogram Percent

Oilseeds and products 633 2,728 331 2,489 5,749 131 0.25 0.47 86

Soybeans 400 1,542 285 718 3,473 384 0.23 0.44 91

Soybean meal 68 528 677 313 1,384 342 0.23 0.38 68

Soybean oil 13 216 1,565 27 212 686 0.47 1.02 115

Other 152 441 191 -- -- -- -- -- --

Tobacco, unmanufactured * 75 35,261 * 13 24,591 3.75 5.64 50

Cotton, excluding linters 118 493 318 87 302 247 1.42 1.64 15

Essential oils 21 83 288 2 6 197 10.46 13.86 32

Mixtures of odoriferous substances for use

 in food and beverage industry

2 53 2,141 * 4 1,396 8.46 12.66 50

Other 19 30 57 -- -- -- -- -- --

Seeds, fi eld and garden 108 248 130 181 90 -50 0.76 2.74 261

Sugar and tropical products 154 766 399 -- -- -- -- -- --

Fructose syrup, containing more than 50

 percent by weight of fructose, NESOI

5 215 4,115 17 683 4,037 0.31 0.32 0

Chocolate and preparations 47 161 243 16 49 205 2.92 3.27 12

Glucose or glucose syrup 5 108 1,911 18 281 1,446 0.37 0.38 4

Sugar, cane or beet 44 96 116 116 179 54 0.36 0.54 50

Other 52 186 260 -- -- -- -- -- --

Other horticulutural products 60 511 754 -- -- -- -- -- --

Soups, broths, and preparations there 

 of, dried

18 154 747 9 58 510 1.91 2.67 40

Other 42 357 757 -- -- -- -- -- --

Beverages, excluding juices 51 148 188 -- -- -- -- -- --

Beer from malt3 12 85 583 22 114 410 0.55 0.74 35

Other 39 63 62 -- -- -- -- -- --

Other 40 94 134 -- -- -- -- -- --

Unit value is calculated as the average of the annual unit values for the 3 years in the period specifi ed. 

 -- = not available.

* 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 data from USDOC, Census Bureau, Foreign Trade Statistics, as cited by 

USDA/FAS (2011a).
63

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Economic Research Service/USDA

Appendix table 3

Selected U.S. agricultural imports from Mexico, 1991-93 versus 2008-10

Value Volume Unit value

Annual average

Change

Annual average

Change

Annual average

Change

1991-93 2008-10 1991-93 2008-10 1991-93 2008-10

Million dollars Percent

1,000 

metric tons Percent

Dollars per 

kilogram Percent

Total 2,542 11,953 370 -- -- -- -- -- --

Animals and animal products 408 786 93 -- -- -- -- -- --

Cattle and calves1 377 401 6 1,104 955 -14 342.67 420.00 23

Beef and veal 2 146 7,166 1 27 4,039 3.51 5.40 54

Other 29 239 725 -- -- -- -- -- --

Grains and feeds 51 668 1,207 -- -- -- -- -- --

Biscuits and wafers2 16 337 2,031 11 156 1,338 1.46 2.16 49

Prepared foods obtained from swelling or

 roasting of cereal fl akes or products, with or 

 without sugar

4 100 2,655 2 32 1,217 1.47 3.09 111

Pastry, not elsewhere specifi ed or indicated 13 63 403 8 31 277 1.52 2.03 34

Other 32 231 628 -- -- -- -- -- --

Fruits and preparations 322 2,118 558 586 2,194 274 0.45 1.07 134

Avocados, fresh or dried 1 521 51,258 1 267 47,616 1.85 1.95 6

Avocados, processed 12 80 553 6 40 601 2.16 2.02 -7

Grapes, fresh 59 325 451 40 132 231 1.47 2.46 67

Strawberries, fresh 15 162 981 12 79 562 1.28 2.04 60

Strawberries, frozen 18 73 297 23 58 154 0.80 1.25 57

Watermelons, fresh 18 205 1,037 89 408 358 0.20 0.50 154

Limes, fresh or dried 20 160 687 87 349 303 0.23 0.46 95

Mangoes, fresh3 63 136 117 80 194 142 0.79 0.78 0

Blackberries, mulberries, and loganberries, 

fresh

* 114 208,420 * 36 65,315 1.45 5.35 268

Raspberries, fresh * 83 529,349 * 12 229,067 2.93 6.71 130

Papayas, fresh 4 62 1,432 7 108 1,359 0.53 0.57 8

Grapefruit, prepared or preserved 3 53 1,769 3 28 956 1.10 1.94 77

Other 108 145 34 -- -- -- -- -- --

Fruit juices 40 182 356 147 486 230 0.29 0.37 28

Orange juice 22 113 412 97 342 253 0.23 0.33 41

Other 18 69 287 -- -- -- -- -- --

Nuts and preparations 55 221 300 17 74 327 3.35 2.97 -11

Pecans 53 189 254 14 53 274 4.02 3.58 -11

Other 2 32 1,660 -- -- -- -- -- --

Vegetables and preparations 923 3,787 310 -- -- -- -- --

Tomatoes, fresh 229 1,252 447 312 1,138 265 0.73 1.10 50

Peppers, fresh 120 563 369 124 569 359 0.97 0.99 2

Cucumbers, fresh 73 250 242 179 452 153 0.41 0.55 35

Squash, fresh 60 204 240 83 248 198 0.72 0.82 15

Onions, fresh 92 189 105 178 202 14 0.52 0.94 79

Broccoli, frozen 89 181 103 133 180 36 0.67 1.01 50

—continued
64

NAFTA AT 17: Full Implementation Leads To Increased Trade and Integration / WRS-11-01 

Economic Research Service/USDA

Appendix table 3

Selected U.S. agricultural imports from Mexico, 1991-93 versus 2008-10—Continued

Value Volume Unit value

Annual average

Change

Annual average

Change

Annual average

Change

1991-93 2008-10 1991-93 2008-10 1991-93 2008-10

Million dollars Percent

1,000 

metric tons Percent

Dollars per 

kilogram Percent

Vegetables and preparations—continued

Asparagus, fresh 29 169 484 21 69 230 1.39 2.44 76

Lettuce, fresh 4 89 2,327 8 102 1,106 0.44 0.87 98

Caulifl ower and broccoli, fresh 4 79 2,004 13 105 689 0.28 0.75 170

Soups and sauces -- 57 -- -- 48 -- -- 1.19 --

Other 223 754 238 -- -- -- -- -- --

Sugar and related products 35 958 2,601 -- -- -- -- -- --

Sugar, cane or beet 1 544 45,835 3 955 36,166 0.82 0.57 -31

Confectionery products 23 366 1,520 15 203 1,293 1.54 1.80 17

Other 12 47 306 -- -- -- -- -- --

Cocoa and cocoa products 20 341 1,624 14 168 1,133 1.69 2.04 21

Coffee and coffee products 279 330 18 182 89 -51 1.53 3.72 142

Coffee, arabica, not roasted, 

 not decaffeinated

25 161 538 17 53 213 1.48 3.01 104

Instant coffee, not fl avored, not decaffeinated,

 packaged for retail sale

1 87 12,743 * 13 5,341 4.85 6.59 36

Other 253 83 -67 -- -- -- -- -- --

Spices and herbs 41 60 46 28 41 46 1.45 1.46 1

Beverages, excluding fruit juices 170 1,856 992 -- -- -- -- -- --

Beer4 145 1,559 975 179 1,562 772 0.82 1.00 22

Carbonated soft drinks4 15 152 911 19 256 1,246 0.80 0.59 -26

Other nonalcoholic beverages4 6 84 1,283 8 113 1,306 0.76 0.74 -2

Other 10 61 512 -- -- -- -- -- --

Oilseeds and oilseed products 38 98 160 32 62 97 1.14 1.58 39

Other horticultural products 52 134 155 -- -- -- -- -- --

Yeasts 10 61 495 7 22 226 1.52 2.78 82

Other 42 73 73 -- -- -- -- -- --

Other 108 413 283 -- -- -- -- -- --

* = Imports average less than $500,000 in value and/or less than 500 metric tons in volume. 

-- = not available.

1Volume is measured in thousands of head, and unit value is measured in dollars per head.

2Includes sweet biscuits, waffl es, 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 data from USDOC, Census Bureau, Foreign Trade Statistics, as cited by 

USDA/FAS (2011a).
65

NAFTA AT 17: Full Implementation Leads To Increased Trade and Integration / WRS-11-01 

Economic Research Service/USDA

Appendix table 4

Selected U.S. agricultural exports to Canada, 1991-93 versus 2008-10

Value Volume Unit value

Annual average

Change

Annual average

Change

Annual average

Change

1991-93 2008-10 1991-93 2008-10 1991-93 2008-10

Million dollars Percent

1,000 

metric tons Percent

Dollars per 

kilogram Percent

Total 4,954 16,278 229 -- -- -- -- -- --

Animals and animal products 909 2,610 187 -- -- -- -- -- --

Beef and veal 363 677 86 87 137 58 4.19 4.93 18

Pork 29 545 1,764 9 159 1,597 3.14 3.43 9

Chickens, fresh or frozen 85 261 206 42 115 173 2.03 2.26 11

Poultry meats, prepared or preserved 54 177 231 12 43 248 4.33 4.11 -5

Sausage, other than chicken and turkey 23 88 280 5 20 295 4.56 4.39 -4

Preparations for infant use, retail sale 4 85 1,863 1 23 2,062 4.05 3.75 -7

Eggs 31 73 136 -- -- -- -- -- --

Whey, fl uid or dried 10 52 421 -- -- -- -- -- --

Puddings ready for immediate consumption 4 69 1,664 3 48 1,716 1.49 1.45 -3

Cattle and calves1 36 14 -62 71 35 -51 511.60 389.00 -24

Other 269 568 111 -- -- -- -- -- --

Grains and feeds 759 4,100 440 -- -- -- -- -- --

Dog or cat food, retail sale 146 491 237 142 301 112 1.04 1.63 58

Corn 60 350 487 600 2,024 238 0.10 0.17 71

Brewing or distilling dregs and waste 2 139 7,475 14 878 6,027 0.13 0.16 23

Pastry, cake, bread, and pudding 101 378 273 62 149 142 1.65 2.53 54

Prepared food from swelling or roasting

 of cereal or cereal products 36 250 603 19 117 527 1.91 2.14 12

Mixes and doughs 31 216 594 27 128 368 1.15 1.69 47

Rice 56 167 198 142 225 58 0.39 0.74 88

Stuffed, canned, and other prepared pasta 30 157 428 14 70 399 2.16 2.24 4

Mixed feeds or mixed feed ingredients,

 excluding pet food 84 141 67 145 148 2 0.59 0.95 60

Cookies, waffl es, and wafers 48 142 195 25 59 136 1.64 2.41 47

Corn chips and similar crisp snack foods 11 108 898 6 29 362 1.76 3.71 111

Other bread, pastry, cake, biscuits, and 

 bakery wares, excluding pizza and quiche 8 102 1,105 5 36 689 1.88 2.87 53

Pasta, uncooked2 21 80 284 19 62 216 1.08 1.31 21

Wheat fl our 3 53 1,740 10 105 920 0.27 0.50 83

Pizza and quiche 11 50 342 3 14 307 3.28 3.56 9

Other 111 376 239 -- -- -- -- -- --

Fruits and preparations, excl. juice 711 1,772 149 872 1,201 38 0.82 1.48 80

Strawberries, fresh 51 270 433 36 104 191 1.41 2.59 83

Grapes, fresh 117 183 56 112 98 -13 1.05 1.87 79

Apples, fresh 58 145 152 76 131 73 0.76 1.11 45

Oranges, fresh or dried 80 125 56 155 156 1 0.55 0.80 46

Cherries, fresh 15 111 641 7 25 245 2.14 4.48 110

Raspberries, blackberries, mulberries, and

 loganberries, fresh 4 92 2,055 7 25 244 0.58 3.64 525

Peaches, fresh 46 73 60 50 47 -4 0.93 1.54 66

—continued
66

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Economic Research Service/USDA

Appendix table 4

Selected U.S. agricultural exports to Canada, 1991-93 versus 2008-10—Continued

Value Volume Unit value

Annual average

Change

Annual average

Change

Annual average

Change

1991-93 2008-10 1991-93 2008-10 1991-93 2008-10

Million dollars Percent

1,000 

metric tons Percent

Dollars per 

kilogram Percent

Fruits and preparations, excl. juice—continued

Watermelons, fresh 25 67 165 78 136 74 0.37 0.50 33

Other 314 705 124 -- -- -- -- -- --

Fruit juices3 156 516 230 267 469 76 0.59 1.10 87

Orange juice3 83 259 213 155 260 68 0.54 1.00 86

Mixtures of fruit juices, unfermented,

 not fortifi ed with vitamins or minerals 8 69 792 11 51 384 0.75 1.36 82

Other 66 188 186 -- -- -- -- -- --

Wine3 42 242 479 32 58 83 1.28 4.16 224

Nuts and preparations 129 457 254 72 182 151 1.78 2.52 42

Almonds, fresh or dried 30 94 213 9 20 127 3.37 4.62 37

Peanuts, shelled, not oilstock 38 79 110 43 79 83 0.89 1.01 13

Popcorn, microwaveable -- 60 -- -- 33 -- -- 1.79 --

Other 61 225 266 -- -- -- -- -- --

Vegetables and preparations 918 2,321 153 -- -- -- -- -- --

Lettuce, fresh 109 393 259 254 292 15 0.43 1.35 212

Tomatoes, fresh 114 137 21 137 107 -22 0.83 1.28 55

Carrots, fresh 26 119 368 71 103 45 0.36 1.16 223

Tomato sauces, other than ketchup 36 126 255 35 119 243 0.90 1.06 18

Potatoes, fresh4 62 97 56 179 203 13 0.36 0.48 34

Potatoes, frozen 1 78 5,608 1 77 5,511 0.99 1.00 2

Potato chips 24 60 146 10 18 81 2.48 3.36 36

Other sauces and preparations 25 97 282 17 40 138 1.51 2.43 61

Onions and shallots, fresh 42 95 124 103 136 31 0.41 0.70 71

Peppers, fresh 45 84 89 69 57 -17 0.68 1.49 120

Broccoli, fresh 41 72 76 72 66 -9 0.57 1.10 94

Caulifl ower, fresh 32 72 127 44 73 66 0.72 0.98 36

Celery, fresh 36 56 57 96 94 -1 0.37 0.60 60

Spinach, fresh or chilled 9 55 487 12 24 99 0.76 2.24 195

Other 316 780 147 -- -- -- -- -- --

Oilseeds and products 322 1,450 350 961 2,449 155 0.33 0.59 78

Soybean meal 151 421 178 625 1,196 91 0.24 0.35 45

Soybeans 37 129 247 154 324 111 0.24 0.40 68

Soybean oil 8 64 726 15 54 270 0.53 1.18 124

Rapeseed 8 90 1,079 29 233 703 0.26 0.38 47

Rapeseed oil 2 135 7,777 3 147 5,656 0.74 0.92 24

Vegetable fats and oils and their fractions,

 hydrogenated, inter-esterifi ed, reesterifi ed,

 or elaidinized 6 87 1,385 5 60 1,085 1.16 1.45 24

Protein substances 16 62 285 6 12 87 2.58 5.34 107

Sunfl ower oil 5 61 1,041 9 53 486 0.59 1.16 97

Other 89 402 352 -- -- -- -- -- --

—continued
67

NAFTA AT 17: Full Implementation Leads To Increased Trade and Integration / WRS-11-01 

Economic Research Service/USDA

Appendix table 4

Selected U.S. agricultural exports to Canada, 1991-93 versus 2008-10—Continued

Value Volume Unit value

Annual average

Change

Annual average

Change

Annual average

Change

1991-93 2008-10 1991-93 2008-10 1991-93 2008-10

Million dollars Percent

1,000 

metric tons Percent

Dollars per 

kilogram Percent

Cotton, excluding linters 61 4 -93 37 3 -93 1.62 1.73 6

Essential oils 48 317 554 4 24 499 11.48 13.27 16

Mixtures of odoriferous substances for use

 in food and beverage industry 33 290 770 3 21 680 12.28 13.77 12

Other 15 27 77 -- -- -- -- -- --

Seeds, fi eld and garden 67 206 208 39 80 106 1.73 2.59 50

Corn seed, excluding sweet corn seed 10 95 853 8 28 250 1.25 3.40 172

Other 57 111 95 -- -- -- -- -- --

Sugar and tropical products 396 1,550 292 -- -- -- -- -- --

Coffee, roasted, not decaffeinated 44 374 742 9 70 700 5.14 5.37 4

Sugar confections and sweetmeats

 without cocoa 61 246 301 30 76 158 2.07 3.23 56

Confectionery containing cocoa 51 153 200 17 36 113 2.38 4.25 78

Cocoa preparations in bulk form 18 108 496 8 40 379 2.22 2.73 23

Food preparations containing cocoa other 

 than confectionery, put up for retail sale 2 98 4,492 0 23 4,418 1.43 4.36 205

Tea, including herbal tea 22 82 270 4 14 226 5.20 1.93 -63

Glucose and glucose syrup 24 71 194 63 159 154 0.39 0.45 15

Cocoa butter 12 54 367 3 13 355 4.18 4.27 2

Other 160 363 126 -- -- -- -- -- --

Other horticultural products 322 1,450 350 961 2,449 155 0.33 0.59 78

Starches, excluding wheat and corn starch 22 69 218 36 81 125 0.63 0.86 37

Mixed condiments and mixed seasonings 13 68 401 4 23 455 2.65 2.94 11

Soups, broths, and other preparations, not

 based on fi sh or other seafood, not dried 5 67 1,191 3 32 879 1.64 2.12 29

Other 132 799 505 -- -- -- -- -- --

Nursery and greenhouse products 110 200 83 -- -- -- -- -- --

Beverages excluding juices 109 414 278 -- -- -- -- -- --

Beer made from malt3 20 118 488 39 106 173 0.57 1.12 95

Preparations for the manufacture of beverages 44 83 91 8 20 144 5.34 4.20 -21

Carbonated soft drinks 9 68 641 16 100 529 0.62 0.69 10

Other nonalcoholic beverages 24 127 419 29 160 456 0.85 0.79 -7

Other 12 18 45 -- -- -- -- -- --

Other 45 14 -70 -- -- -- -- -- --

-- = not available.

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.

Source: USDA, Economic Research Service using data from USDOC, Census Bureau, Foreign Trade Statistics, as cited by 

USDA/FAS (2011a).
68

NAFTA AT 17: Full Implementation Leads To Increased Trade and Integration / WRS-11-01 

Economic Research Service/USDA

Appendix table 5

Selected U.S. agricultural imports from Canada, 1991-93 versus 2008-10

Value Volume Unit value

Annual average

Change

Annual average

Change

Annual average

Change

1991-93 2008-10 1991-93 2008-10 1991-93 2008-10

Million dollars Percent

1,000 

metric tons Percent

Dollars per 

kilogram Percent

Total 4,044 16,320 304 -- -- -- -- -- --

Animals and animal products 1,784 4,201 136 -- -- -- -- -- --

Beef and veal 283 873 208 121 287 137 2.34 3.04 30

Cattle and calves1 802 1,144 43 1,127 1,235 10 706.63 926.00 31

Pork 368 756 105 177 294 66 2.08 2.57 24

Swine1 82 380 363 854 7,153 738 65.47 53.00 -19

Confectionery (including gum) containing

 synthetic sweetening agents instead of 

 sugar

-- 156 -- -- 24 -- -- 6.48 --

Chicken, fresh or frozen 1 114 11,183 1 41 6,168 1.52 2.77 82

Mink furskins2 22 68 209 1,071 1,675 56 20.57 40.51 97

Chicken sausages and similar products -- 51 -- -- 12 -- -- 4.10 --

Bovine hides and skins, whole3 65 37 -43 1,625 821 -49 39.80 65.07 64

Grains and feeds 759 4,100 440 -- -- -- -- -- --

Wheat, excluding seed 154 731 374 1,268 2,297 81 0.12 0.32 163

Bread, pastry, cakes, biscuits, and puddings 146 595 307 77 249 221 2.00 2.85 43

Oats, unmilled 54 368 583 576 1,730 200 0.10 0.21 117

Grains, rollled or fl aked, of oats 1 62 4,981 4 111 2,685 0.30 0.56 85

Groats and meal of oats 3 56 1,927 11 128 1,091 0.26 0.44 68

Sweet biscuits, waffl es, and wafers, not

 frozen

17 396 2,171 8 106 1,170 2.19 3.75 71

Sweet biscuits, waffl es, and wafers, frozen * 125 74,368 * 53 76,028 3.37 2.37 -30

Mixes and doughs 14 246 1,644 12 149 1,126 1.22 1.66 35

Prepared food from swelling or

 roasting cereal fl akes or products

48 177 271 27 76 181 1.76 2.32 32

Malt, not roasted 3 186 6,114 13 311 2,337 0.24 0.60 153

Barley, unmilled 46 134 189 474 469 -1 0.10 0.29 189

Dog or cat food, retail sale 46 114 147 67 59 -12 0.69 1.94 180

Mixed feeds or mixed feed ingredients,

 excluding bird feed and pet food

44 106 142 166 143 -14 0.26 0.74 183

Cereals other than corn, grain form, 

 precooked or otherwise prepared, not frozen

* 94 74,122 * 37 82,547 1.39 2.54 83

Pasta and noodles4 12 93 658 12 40 223 0.99 2.32 134

Wheat or meslin fl our 13 83 552 46 123 169 0.11 0.65 489

Corn, unmilled 27 56 103 284 272 -4 0.10 0.21 111

Prepared food from unroasted cereal fl akes 

 or mixtures of roasted and unroasted fl akes 

 or swelled cereals

14 56 296 8 26 239 1.86 2.17 17

Stuffed, canned, or other prepared pasta 7 50 673 6 12 116 1.27 4.17 228

Other 110 373 240 -- -- -- -- -- --

—continued
69

NAFTA AT 17: Full Implementation Leads To Increased Trade and Integration / WRS-11-01 

Economic Research Service/USDA

Appendix table 5

Selected U.S. agricultural imports from Canada, 1991-93 versus 2008-10—Continued

Value Volume Unit value

Annual average

Change

Annual average

Change

Annual average

Change

1991-93 2008-10 1991-93 2008-10 1991-93 2008-10

Million dollars Percent

1,000 

metric tons Percent

Dollars per 

kilogram Percent

Fruits and preparations, excluding juice 71 409 478 100 195 95 0.72 2.10 191

Blueberries, frozen 10 99 940 6 36 542 1.72 2.78 62

Blueberries, fresh 10 56 453 9 18 113 1.17 3.06 162

Cranberries, fresh 12 52 352 17 38 125 0.70 1.39 100

Other 40 202 410 -- -- -- -- -- --

Fruit juices4 10 51 422 16 60 275 0.62 0.86 39

Vegetables and preparations 195 2,002 925 -- -- -- -- -- --

Potatoes, frozen 54 641 1,096 99 738 647 0.54 0.87 61

Potatoes, fresh5 33 129 293 189 398 110 0.17 0.32 93

Tomatoes, fresh 5 273 4,889 4 131 3,009 1.36 2.09 53

Peppers, fresh 5 192 3,559 3 76 2,878 2.10 2.51 20

Cucumbers, fresh 3 89 2,487 4 62 1,595 0.94 1.42 52

Mushrooms, fresh or chilled 3 74 2,458 2 23 1,210 1.68 3.24 93

Tomato ketchup * 54 62,960 * 56 50,054 0.69 0.97 41

Other 92 551 500 -- -- -- -- -- --

Sugar and related products 193 677 251 -- -- -- -- -- --

Confectionery products, except chewing gum 29 335 1,036 18 131 625 1.64 2.55 55

Maple syrup, including blends with sugar 28 144 407 12 24 105 2.49 6.10 145

Glucose and glucose syrup 15 59 288 69 174 152 0.22 0.34 54

Chewing gum 30 53 75 17 25 53 1.80 2.06 15

Other 89 86 -3 -- -- -- -- -- --

Cocoa and cocoa products 148 759 415 78 245 213 1.89 3.10 63

Chocolate in blocks, slabs, or other bulk form,

 not containing butterfat or other milk solids

33 231 597 25 87 252 1.35 2.66 97

Chocolate in blocks or slabs of 4.5 kilograms 

 or more, containing butterfat or other milk 

 solids

17 109 521 8 44 487 2.32 2.47 6

Confectionery, fi lled, not containing peanuts,

 peanut butter, or peanut paste

-- 77 -- -- 19 -- -- 3.97 --

Other 97 342 253 -- -- -- -- -- --

Coffee and coffee products 33 197 495 6 25 330 5.79 7.98 38

Coffee, roasted, not decaffeinated, in retail

 containers weighing 2 kilograms or less

3 142 4,023 1 17 2,338 4.84 8.20 69

Other 30 54 83 -- -- -- -- -- --

Tea and mate, including herbal tea 24 94 301 37 55 48 0.67 1.72 157

Preparations of tea or mate containing over 

 10 percent by dry weight of sugar

-- 59 -- -- 52 -- -- 1.12 --

Other -- 36 -- -- -- -- -- -- --

—continued
70

NAFTA AT 17: Full Implementation Leads To Increased Trade and Integration / WRS-11-01 

Economic Research Service/USDA

Appendix table 5

Selected U.S. agricultural imports from Canada, 1991-93 versus 2008-10—Continued

Value Volume Unit value

Annual average

Change

Annual average

Change

Annual average

Change

1991-93 2008-10 1991-93 2008-10 1991-93 2008-10

Million dollars Percent

1,000 

metric tons Percent

Dollars per 

kilogram Percent

Spices and herbs 21 82 297 60 79 32 0.35 1.04 201

Mustard seeds 15 57 273 55 62 14 0.28 0.92 228

Other 5 25 365 -- -- -- -- -- --

Beverages, excluding fruit juices 196 366 87 -- -- -- -- -- --

Beer made from malt6 148 234 59 262 320 22 0.57 0.73 29

Preparations for beverages 5 60 1,066 4 25 508 1.24 2.06 67

Other 43 72 67 -- -- -- -- -- --

Oilseeds and products 318 2,271 615 1,221 4,065 233 0.26 0.56 116

Rapeseed oil 151 1,120 643 297 1,061 257 0.50 1.06 109

Rapeseed 13 312 2,331 55 692 1,161 0.25 0.45 77

Rape or colza seed oilcake 67 303 354 520 1,550 198 0.21 0.20 -5

Soybeans 21 127 516 96 302 216 0.22 0.42 96

Flaxseed 24 87 262 130 147 13 0.19 0.59 216

Other 43 322 653 -- -- -- -- -- --

Seeds, fi eld and garden 50 183 267 73 167 128 0.68 1.10 61

Nursery stock, bulbs, etc. 85 243 187 -- -- -- -- -- --

Other horticultural products 82 493 503 -- -- -- -- -- --

Soups, broths, and preparations, not dried,

 not based on fi sh or seafood

5 98 1,892 4 74 1,954 1.68 1.33 -21

Yeasts 16 70 349 18 54 195 0.84 1.28 52

Other 61 325 431 -- -- -- -- -- --

Other 78 36 146 -- -- -- -- -- --

* Less than $500,000 in value and 500 kilograms in volume. 

 -- = not available.

1 Volume is measured in thousands of head, and unit value is measured in dollars per head.

2 Volume is measured in thousands of furskins, and unit value is measured in dollars per furskin.

3 Volume is measured in thousands of pieces, and unit value is measured in dollars per piece.

4 Excludes stuffed pasta and canned pasta.

5 Excludes seed potatoes.

6 Volume is measured in millions of liters, and unit value is measured in dollars per liter.

Source: USDA, Economic Research Service using data from USDOC, Census Bureau, Foreign Trade Statistics, as cited by 

USDA/FAS (2011a).
71

NAFTA AT 17: Full Implementation Leads To Increased Trade and Integration / WRS-11-01 

Economic Research Service/USDA

Appendix table 6

Foreign direct investment within the NAFTA region’s food industry

Origin/destination

Food and kindred products

1994 1995 1996 1997 1998

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.

(D) (D) (D) 306 1,092

Food industry

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Million dollars

U.S. direct investment

 in Canada

3,693 3,431 3,421 4,153 3,964 2,821 2,718 2,998 4,393 4,456 4,973

U.S. direct investment

 in Mexico

1,281 1,427 1,250 2,159 2,134 2,203 2,790 2,610 2,835 2,549 (D)

Canadian direct

 investment in the U.S.

1,088 1,405 984 983 922 1,175 2,109 1,235 1,253 1,081 1,365

Mexican direct

 investment in the U.S.

1,060 1,058 1,102 (D) (D) 1,934 3,043 (D) (D) 1,934 3,043

Note: Kindred products refers primarily to beverages. Data indicate investment position on a historical-cost basis.

(D) = Suppressed in order to avoid disclosure of data of individual companies

Source: USDA, Economic Research Service using data from USDOC/BEA (2010a, 2010b).