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USGC: Agriculture wins with implementation of NAFTAOn Jan. 1, agricultural trade between Mexico and the United States became completely duty-free with the end of the implementation period of the North American Free Trade Agreement. All U.S. products will now be able to enter Mexico without any duties. The same will occur with Mexico's exports to the United States. According to Ken Hobbie, U.S. Grains Council president and CEO, NAFTA's agricultural agreement promotes the total liberalization of agriculture and forestry in the region and is one of the most successful trade agreements in U.S. history. He said NAFTA is not a new agreement and was actually enacted in 1994 with a phase out period of all duties over a 15-year period. With the full implementation of NAFTA, the last remaining trade restrictions on a handful of agricultural commodities such as U.S. exports to Mexico of corn and high fructose corn syrup and Mexican exports to the United States of sugar and certain horticultural products are now removed. "This agreement is undoubtedly a huge success for U.S. farmers, but also for livestock and poultry producers in Mexico," said Hobbie. "Specifically, this agreement is responsible for dramatically increasing agricultural trade between the United States and Mexico," adding that the Council worked with end-users of feed grains and trade associations in Mexico during the entire period of the phase-in of the trade pact to ensure completion and smooth transition to a free-market. According to USDA's Foreign Agricultural Service, since the agreement's implementation, FAS recorded that two-way agricultural trade between the United States and Mexico has risen from $5.9 billion to $24 billion. Since 2005, the United States has invested nearly $20 million in programs and technical exchanges to assist Mexico in addressing production, distribution and marketing-related challenges associated with the transition to free and open trade, according to a statement from Acting Agriculture Secretary Chuck Conner. Julio Hernandez, USGC acting director in Mexico, said despite contrary reports, there is no crisis in Mexico stemming from NAFTA's full implementation. In fact, Hernandez said corn farmers in Mexico are getting the best price in history for their products. In addition, he said NAFTA has eased a looming crisis regarding the availability of corn, which significantly increased the price of tortillas over the last year or more for the Mexican consumer. "We are now getting all the corn we need, which is leveling the price of food and feed for Mexican farmers and consumers," Hernandez said. According to Hobbie, liberalized trade has been a long time goal of the Council's and is seeing several additional examples of steps in the right direction. "NAFTA is essential to expanding trade opportunities for U.S. feed grain exports to Mexico. Since NAFTA, Congress has approved CAFTA (Central American Free Trade Agreement), Chile, Peru and many others. Trade pacts with Colombia and Panama are currently awaiting approval. If passed, the U.S. ultimately will have broadened market access for U.S. feed grains to over two-thirds of the population in the Western Hemisphere. U.S. feed grains producers win in a free trade environment." 2/25/08 Date: 2/15/08
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