NAFTA: INTERNATIONAL AGRICULTURE AND TRADE--SUMMARY        September 2, 1997
            Approved by the World Agricultural Outlook Board
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This SUMMARY of NAFTA:  INTERNATIONAL AGRICULTURE AND TRADE (WRS-97-2, 
September 1997) is published by the Economic Research Service, U.S. Department 
of Agriculture, Washington, DC 20005-4788.  The complete text of the report
will be available 1-2 weeks following this summary release.
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NAFTA Has a Positive Impact on U.S. Agriculture

The North American Free Trade Agreement (NAFTA) has had a positive effect on
U.S. agriculture, helping to boost U.S. agricultural exports to both Mexico and
Canada.  During 1993-96, U.S. agricultural exports to Mexico and Canada rose
from $8.9 billion to $11.6 billion.  U.S. agricultural imports from the two
NAFTA partners grew from $7.3 billion to $10.5 billion.  Analysis by the
Economic Research Service finds that NAFTA is responsible for a little more than
20 percent of the increase in U.S. agricultural exports to Mexico and Canada
since the agreement began.  Slightly less than 20 percent of the increase in
U.S. agricultural imports from the two countries can be attributed to NAFTA.

Mexico is a rapidly growing market for U.S. agriculture, averaging 14.8 percent
growth per year since 1993, compared with 12.4 percent average growth for all
U.S. agricultural exports.  In the mature Canadian market, U.S. agricultural
exports have grown an average 5.2 percent a year since 1993.

Many factors besides NAFTA have influenced North American agricultural markets
in recent years.  The United States, Mexico, and Canada have all adopted
fundamental domestic agricultural policy reforms that have affected some North
American agricultural markets in ways that are difficult to separate from the
direct effects of NAFTA.  In addition, weather-related production shortfalls, 
income growth, and changing technology all contributed to the growth in trade. 

In its first 3 years,  NAFTA has already increased access for a broad range of
U.S. farm and food products to Canada and Mexico, boosting U.S. sales.  The
competitiveness of the United States in a broad range of agricultural sectors is
enhanced by lower restrictions at the border.  More open trade within North
America has mitigated local production shortfalls caused by adverse weather,
securing more stable supplies and reducing commodity price volatility. 
Consumers in all three NAFTA countries have benefited from more access to wider
sources of supply.  NAFTA kept Mexican markets open to U.S. products during
Mexico's economic crisis, and helped spur a rapid recovery in the Mexican
economy and U.S. exports.

NAFTA is a long-term agreement, with implementation periods of up to 15 years
for some commodities.  After 3 years under NAFTA, many tariffs between the
United States and Mexico have already been eliminated, and most of the remaining
tariffs have declined more than one-third.  Most tariffs between the United
States and Canada will be eliminated on January 1, 1998.

This International Agriculture and Trade Report from the Economic Research
Service is a USDA report to Congress on impacts of the NAFTA agreement. 
Biennial reports, beginning this year, on the effects of NAFTA are required
under the NAFTA Implementing Legislation of 1993.

For more information on the report content, contact Terri Raney
(tlraney@econ.ag.gov).  For information on ERS products and services, contact
ERS Customer Service at (202) 219-0515 or service@econ.ag.gov/.  
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