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Abstract

The North American Free Trade Agreement (NAFTA) is a comprehensive trade liberalizing agreement among Canada, Mexico, and the United States. This is especially true for Agricultural trade between Mexico, and the United States. Agricultural trade barriers between Mexico and the United States were completely eliminated on January 1, 2008. The agreement facilitates cross-border investment, phytosanitary standards, cooperation regarding the environment and labor, and set up a dispute resolution procedure, and regular consultation procedures. Each of the countries entered NAFTA hoping to gain greater market access and growth in trade, as well as access to capital, technology, a favorable trade advantage and other gains. The question is, were these expectations met? NAFTA countries did not stop with NAFTA as their only regional trade agreement. Each of these added agreements reduced the advantage initially gained by NAFTA producers, as barriers were also reduced for other competitors. Foreign direct investment on all industries has increased from US $15 billion in 2003 to US $95 billion in 2008, but probably less than hoped for because after 2000 more capital and jobs began to flow to China and India. Industry continues to seek low cost labor, and Mexico is no longer the cheapest labor market. However agricultural trade increased between NAFTA partners from US $10 billion in 1989 to US $67 billion in 2008 with greater integration of agricultural markets. Mexico's total agricultural exports (to all countries) approached US $16.9 billion in 2008. Corresponding imports in 2008 totaled about US $23.2 billion. Mexico's NAFTA imports grew from almost US $4 billion in 1993 to US $14 billion in 2009. Mexico's NAFTA Agricultural export grew from US $2.9 to US $12.3 billion for the same period.

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