NAFTA is a trade agreement between the United States, Mexico, and Canada that virtually eliminated all tariffs between the countries, as well as other trade barriers such as setting higher regulatory standards for foreign goods than for those produced locally. It was first negotiated under the President George H.W. Bush administration, and was then implemented in 1994 by President Bill Clinton.
Since the Trump Administration began talking about potentially renegotiating NAFTA, much attention has been given to the importance of trade between the United States, Mexico and Canada. Agricultural-related issues that could be revisited in a “modernized” NAFTA include biotechnology, sanitary and phytosanitary measures, and geographic indicators.
Combined, Canada and Mexico account for about one-third of U.S. agricultural exports. Since implementation of NAFTA, their agricultural exports have also increased by more than 300%, totaling approximately $310 billion.
In 1993, U.S. exports to NAFTA partners totaled $8.9 billion, of which 18 percent were bulk goods, 22 percent intermediate goods, and 59 percent consumer-oriented goods. In 2016, U.S. exports to Canada and Mexico totaled $38.1 billion, of which 17 percent were bulk goods, 19 percent intermediate goods, and 64 percent consumer-oriented goods. This translates to more value being added in the United States before goods are exported, thus more U.S. jobs and tax revenues.
Overall, since NAFTA was enacted, the United States has enjoyed a trade surplus with Canada and Mexico of approximately $5.6 billion. Since 2014, net trade in agricultural commodities has been negative, as the value of U.S. exports have fallen slightly due to lower commodity prices and lower volumes due to a strong U.S. dollar, while imports, especially consumer-oriented, have continued to grow strongly.
Neither MFB nor AFBF currently have policy on NAFTA renegotiation.
MFN NAFTA article