MARCH 2018 FOOD & AGRICULTURE QUARTERLY PAGE 7
The future without NAFTA ?
WILL SJOBERG
The North American Free Trade Agreement ( NAFTA ) is over 20 years old . Whether it should be changed is open to debate . What is not open to debate is that NAFTA will change , either through revision or termination . While the different permutations and combinations of what a revised NAFTA may or may not include are infinite , the same cannot be said of a terminated NAFTA .
In 1994 , the first year of NAFTA , the U . S . experienced a $ 177 billion overall trade deficit . Notwithstanding that deficit , the U . S . also experienced a $ 10.6 billion agricultural trade surplus . That U . S . agricultural surplus was somewhat offset by a $ 68.7 million U . S . agricultural trade deficit with Canada and Mexico . In other words , in 1994 , U . S . agricultural trade was 4.7 percent of U . S . trade and , of that amount , 25.8 percent consisted of U . S . agricultural trade with Canada and Mexico .
Contrast the foregoing statistics with those from 2016 and , other than magnitudes , little
has changed . In 2016 , the U . S . experienced a $ 797.7 billion overall trade deficit . However , in that same year , the U . S . also experienced a $ 16.8 billion agricultural trade surplus . Again , that U . S . surplus was offset by a $ 5.2 billion agricultural trade deficit with the U . S .’ two NAFTA partners . The ratio of U . S . agricultural trade to total U . S . trade remained stable at 4.8 percent . However , the percentage of U . S . agricultural trade originating from or destined to Canada and Mexico increased to 31.1 percent ( or by 5 percentage points ) of total U . S . agricultural trade .
NAFTA ’ s primary objective was and still is to eliminate barriers to trade in , and facilitate cross-border movement of , goods and services between the U . S ., Canada and Mexico . While there are eight provisions in NAFTA that address agriculture , the most important provision to U . S . farmers is elimination of tariffs and the market access granted to their agricultural exports to Canada and Mexico . In the first 23 years under
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