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Abstract

This Discussion Paper shows that the demand for imported dairy products will continue to be strong in Mexico, especially after the 2001-2002 recession ends. However, Mexico's dairy markets have matured under the NAFTA. As part of the maturity, a larger number of strong domestic firms have emerged and powerful European multi-nationals have increased dairy product sales in Mexico. In addition, the expansion of U.S. exports of fluid milk, yogurt, dried whey, and lactose to Mexico will be slow in near future because U.S. market shares of imports of these products are already large. Thus, Mexico's dairy markets no longer represent "low hanging fruit" (if they ever did) for U.S. dairy exporters and direct investors

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