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Abstract

U.S. exports of poultry to Mexico have increased steadily since NAFTA came into force in January 1994. The Mexican poultry industry has become increasingly concerned about these exports, arguing that it cannot compete with U.S. products. The Mexicans argue that U.S. poultry exports to Mexico are duty free under NAFTA (as of January 1, 2003). The Mexican industry also argues that U.S. poultry benefits from low-priced feed resulting from U.S. Government farm programs. We analyzed the impact of tariffs and U.S. feed grain programs on U.S. exports of poultry, and find that other factors appear to be more important in explaining trade. Specifically, Mexican preferences for dark meat provide large price incentives for U.S. exporters, while Mexican Government policies in support of its grain sector penalize poultry producers in Mexico.

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