Friday, January 27, 2017

U.S.-Mexico agricultural trade helps the U.S. economy and nutrition for consumers

For the United States, trade with Mexico offers many benefits for the economy and dietary quality for American consumers. 

Regarding the economic benefits, a recent August 2016 article in the magazine Amber Waves, from the U.S. Department of Agriculture -- by USDA economists Steven Zahniser, Adriana Moreno, and Arturo Ruanova -- emphasizes the contribution of the North American Free Trade Agreement (NAFTA). Gradually, from 1994 to 2008, they write, NAFTA removed tariffs and quotas, while at the same time reconciling rules on both sides of the border about how food safety is protected:
Together, this sweeping trade liberalization and ongoing regulatory cooperation made possible a dramatic increase in U.S.-Mexico agricultural trade.
The results included an enormous jump in export sales to Mexico, benefiting U.S. farmers. A chart in the Amber Waves article shows that agricultural trade with Mexico is nearly in balance, with agricultural exports equal to or exceeding imports in most years.

USDA's Foreign Agricultural Service has a page devoted to agricultural exports to Mexico, with statistics, links to agricultural trade offices in Mexico City and Monterrey, and a guide for exporters who seek to do business in Mexico. The top 5 U.S. export industries are dairy ($1.3 billion), pork ($1.3 billion), beef ($1.1 billion), poultry ($1.0 billion), and prepared food ($707 billion). Producers in these industries are important to the U.S. agricultural economy, and they are politically influential.

Like the Amber Waves article, USDA's FAS notes the role of NAFTA in this trade:
Under the North American Free Trade Agreement (NAFTA), Mexico and the United States have eliminated all tariffs and quantitative restrictions on agricultural goods and have strengthened scientific ties to eradicate diseases and pests, conduct research and enhance conservation.
Moving beyond just agricultural products, the office of the U.S. Trade Representative (USTR) has a web page devoted just to trade with Mexico. For U.S. producers, Mexico was the second-biggest export market in the world. Total U.S. trade with Mexico is more in balance than trade with several other countries. In 2015, U.S. exports to Mexico were an astonishing $240 billion, almost double our exports to China. Meanwhile, U.S. imports from Mexico were $294 billion, much less than our imports from China. Our trade deficit with Mexico is just $54 billion (much smaller than our deficit with China, Germany, or Japan, for example).

For nutrition, federal government sources place a heavy priority on increased consumption of fruits and vegetables. For example, the Healthy People 2020 initiative lists fruit and vegetable consumption as "Leading Health Indicators" and proposes ambitious goals for increased consumption.

USDA data on food imports show that fruit imports from Mexico increased almost 6-fold from 2000 ($0.8 billion) to 2014 ($4.7 billion). Similarly, vegetable imports from Mexico increased 3-fold from 2000 ($1.7 billion) to 2014 ($5.4 billion). With increased tariffs or reduced trade with Mexico, fruit and vegetable prices in the United States would be much higher. The consequence of reduced agricultural trade with Mexico would be that Mexicans would have more fruits and vegetables (and less beef, pork, and processed food), while U.S. consumers would have less fruits and vegetables (and more beef, pork, and processed food).

I always read with great care the large literature by public interest advocates who raise serious concerns about agricultural trade with Mexico. For example, Tom Philpott at Mother Jones describes conditions for agricultural workers in Mexico as "heartbreaking." Food and Water Watch argues that provisions for sanitary/phytosanitary rules in existing and proposed trade agreements are too weak. I hear the point of each, and yet think that reduced trade is not the remedy. I do not think the workers in Tom's story are helped by shutting down the U.S. Mexico border, and I think Mexico is capable of producing food to the same standards as producers in Florida or California. Looking forward beyond the hardships that excellent public interest sources have noted, we can improve labor and food safety standards without exaggerating differences across the border as if we had our own house fully in order.

In short, U.S.-Mexico trade is important and beneficial to the U.S. economy and nutrition. You can hear this view from me, and (as of this writing) you can hear it from the steady, sober online data sources maintained by the federal government.


Anonymous said... neglected to mention the estimated $20-30 billion in illicit drugs exported from Mexico into the US each year, or the trade balance in human trafficking.

Sure, trade will be temporarily disrupted by negotiations over illegal immigration across our border with Mexico. That's the sort of thing that makes for good fruitful negotiations, when each party needs something from the other. It's a negotiation that has been neglected for far too long. At least now we have Mexico's attention. They have thumbed their noses at us to this point, knowing full well the Obama administration would only ignore their transgressions, if not openly encourage them.

Wall or no wall, and regardless of who pays for it, this is a golden opportunity to get all our stuff straightened out with Mexico. Maybe entice a few of our lost manufacturing jobs back home from Mexico. If you bleeding hearts want to negotiate better working conditions for Mexican farmhands, well, here's your big chance. If you want to force Mexico to bring their food safety standards up to par with ours (and with the rest of the developed world), here's your big chance. Just as the silent majority would like to restore some manufacturing in our domestic economy and get illegal immigration under control, here's out big chance.

From where I'm standing it certainly looks like anyone opposed to these long overdue trade and immigration negotiations with Mexico is someone who is protecting human trafficking and the drug trade. I earnestly hope Pres. Trump & crew are not frightened off by the temper tantrums of a few Liberal Elites, by the army of Mexican drug cartel thugs...or by a threatened temporary scarcity of avocados in American supermarkets. Heck, we can close the border and still get all the fruits and vegetables we desire from Chile, Brazil, other nations far more productive and far more progressive than Mexico.

Give it a chance and give it a little time. Mexico will come around. They will eventually clean up their act and play nice. Who knows, Mexico may even be drawn kicking and screaming into the 21st century. They have no viable alternative.

usfoodpolicy said...

I hear you. For example, according to the National Drug Intelligence Center's Methamphetamine Drug Threat Assessment, Mexico is an important source of methamphetamine production ... along with the U.S. Pacific, Southwest, West, and Southeast regions. We could contemplate building walls all over as the solution to drug trade and substance abuse problems. But I hope we consider other approaches as well.

Anonymous said...

Well now Parke, your attempt at diversion does raise an interesting question about law enforcement. If our sanctuary cities encourage illegal immigration, are they also soft on law enforcement around drugs and human trafficking? No data available to visualize how sanctuary cities are doing with those public safety issues, but maybe by the time Federal funding has been cut off to those jurisdictions for a while we will develop a sense. So, your casual observations about domestic Meth production & distribution may have relevance, after all.

Anyway, the trade issue with Mexico will be about our industries that have off-shored there and about our major imports -- cars and electrical appliances -- as well as about illegal immigration. All the rest is small potatoes...or small avocados, actually. I guess I'm not surprised you want to over-simply the situation and make it out to be only about guacamole and salsa. That would be the elitist foodie view of the world, after all.

usfoodpolicy said...

Hi, anonymous. Thanks for your comment. Moving forward, as curator of this forum, I'll moderately step up my standards for relevance and factual content in anonymous posts. This type of insinuation about immigrants, sanctuary cities, and domestic drug supply will not make the cut, but many of your best comments, including some that are highly critical of my posts, would still be welcome. Take it as a constructive challenge.

Anonymous said...

And now adjust it for changing GDP, which might show that NAFTA is not to thank for the increases. Also, that bit at the end where the 2 lines start to drastically diverge is pretty important!

Barbara Patterson said...

I think what's shocking about our trade with Mexico is that the U.S. agricultural trade has a deficit here. Generally when we talk about the deficit it's with goods and services overall, not specific to agriculture which enjoys a surplus in U.S. trade. The fact that agriculture doesn't have a surplus with Mexico is telling. I agree with you regarding the nutrition consequences of stopping trade with Mexico and, in fact, using such a blunt instrument as a 20 percent tariff would be counterproductive. But not sure I buy that our ag trade set up is ideal for either U.S. farmers or Mexican farmers. I'd also exercise caution about what "benefits U.S. farmers", especially when we have free trade agreements with 20 countries, but we are losing farms daily and net farm income is decreasing for the fourth consecutive year.

Armando Olivas said...

With our country's current administration threatening to do away with NAFTA, I think this article provides an excellent point to reflect on. As a student of nutrition at Texas State University, I think it is important to acknowledge what NAFTA has done for the US in the agricultural sector. NAFTA has helped keep vegetable and fruit prices relatively affordable and has helped maintain a steady influx of fruits and vegetables into our country. Data collected by the USDA comparing per capita consumption of select fruits and vegetables before and after the implementation of NAFTA shows that Americans now consume more fruits and vegetables. While it is difficult to single out and credit NAFTA for the positive dietary trend, data compiled by the USDA clearly establishes a correlation between the two. Canada and Mexico are our country's leading suppliers of fruits and vegetables and according to the USDA, 44% of agricultural products imported by the US are horticultural products including fruits and vegetables. I believe it is absolutely necessary for our country's current administration to take into consideration what the elimination of NAFTA would do to our country regarding fruit and vegetable accessibility. Added tariffs and decreased availability would cause fruit and vegetable prices to soar across the nation and lead to decreased fruit and vegetable consumption in an America that is already facing a health epidemic in obesity.

Anavaleria said...

I agree with your blog post trade with Mexico offers numerous benefits for the U.S economy as well as nutrition with consumers. The United States is one of the main trading partners with Mexico. Mexico occupying the third place after China and Canada. A number of trade agreements with the United States have been negotiated for a little over five years, with a view to promote and facilitate trade and investment flows. Mexico has become one of the main importers of raw material, agricultural products and manufactured good to the United States. The U.S. imports more than it exports. That is way it is important to strengthen the negotiations with the U.S, to allow and ensure access to the Mexican products that enter the country to reduce the vulnerability of Mexican exports to joint decisions. Analyzing the economic integration between Mexico and the United States makes it visible the importance of the participation of Mexico in the US market in the commercial field.