U.S. Agricultural Trade with the Western Hemisphere Agribusiness in the Americas Pan American Days University of Texas-Pan American Flynn Adcock Research Associate and Assistant Director Center for North American Studies The Texas A&M University System Edinburg, Texas April 17, 2001 U.S. Agricultural Trade with the Western Hemisphere Agribusiness in the Americas Pan American Days University of Texas-Pan American
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U.S. Agricultural Trade with the Western Hemisphere
Agribusiness in the AmericasPan American Days
University of Texas-Pan American
Flynn AdcockResearch Associate and Assistant Director
Center for North American StudiesThe Texas A&M University System
Edinburg, TexasApril 17, 2001
U.S. Agricultural Trade with the Western Hemisphere
Agribusiness in the AmericasPan American Days
University of Texas-Pan American
Overview
U.S. Agricultural Trade with the Western Hemisphere
North American Free Trade Agreement
Free Trade Area of the Americas
Emerging Issues in Western Hemispheric Trade
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U.S. Agricultural Trade, 1990 - 2000
Source: Foreign Agricultural Trade of The United States , Calender Year, USDA/ERS
$40 $39$43 $43
$46
$56$60
$57$52
$49$52
$23 $23 $25 $25 $27$30
$34$36 $37 $38 $39
1990 1995 2000$0
$10
$20
$30
$40
$50
$60
$70
Billion Dollars
Exports Imports
U.S. Agricultural Exports to Western Hemisphere, 1990-2000
Source: Foreign Agricultural Trade of The United States , Calender Year, USDA/ERS
$4.2$4.6 $4.9
$5.3 $5.6 $5.8 $6.1$6.8 $7.0 $7.1
$7.6
1990 1995 2000$0.0
$2.0
$4.0
$6.0
$8.0
$10.0
Billion Dollars
Canada Mexico South America Central America
U.S. Agricultural Imports from Western Hemisphere, 1990-2000
Source: Foreign Agricultural Trade of The United States , Calender Year, USDA/ERS
$3.2 $3.3$4.1
$4.7$5.3 $5.6
$6.8$7.4
$7.8 $8.0$8.7
1990 1995 2000$0.0
$2.0
$4.0
$6.0
$8.0
$10.0
Billion Dollars
Canada Mexico South America Central America
Competitive vs. Non-competitive Agricultural Imports from Western Hemisphere, 2000
Competitive93.0%
Non-Competitive7.0%
Competitive88.2%
Non-Competitive11.8%
Competitive66.7%
Non-Competitive33.3%
Competitive36.4%
Non-Competitive63.6%
Source: Foreign Agricultural Trade of The United States , Calender Year, USDA/ERS
Canada
South America Central America
Mexico
The North American Free Trade AgreementThe North American Free
Trade Agreement
NAFTANAFTA was implemented January 1, 1994.NAFTA decreases and eliminates tariffs and nontariff barriers between U.S. and Mexico and Canada and MexicoTariffs between U.S. and Canada were decreased by CUSTA, which began January 1, 1989Trade among NAFTA nations now over $662 billionNAFTA countries now account for 31 percent of U.S. Agricultural Trade ($28 billion out of $90 billion)
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NAFTAMost agricultural trade among North American countries now duty free.
Canada still protects poultry and dairy industries through high tariffs (200 - 300%)
The U.S. protects dairy, sugar, cotton, and peanut industries
The U.S., Mexico and Canada have increased their use of antidumping and counterveiling duty cases against each other
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Examples of Impacts of NAFTA
Source: USDA/ERS, 1999
U.S. exports of pork to Mexico 5-10% higher than without NAFTA
U.S. beef exports to Mexico 6-15% higher than without NAFTA
U.S. imports of cantaloup from Mexico 17-25% higher than without NAFTA
U.S. imports of sugar from Mexico 15% higher due to NAFTA
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U.S. Agricultural Trade with NAFTA,Pre- and Post-NAFTA (Canada and Mexico)
USDA, FATUS, Calendar Year.
$7.7$8.9
$10.0$9.3
$11.6 $12.0
$13.2$12.7
$14.2
$6.0
$7.3$8.1
$9.3
$10.6$11.6
$12.5 $12.9$13.7
$1.7 $1.5 $1.9
-$0.1
$1.0$0.4 $0.7
-$0.2
$0.5
1990-92 1993 1994(N1) 1995 1996 1997 1998 1999 2000(N7)
$0.0
$2.0
$4.0
$6.0
$8.0
$10.0
$12.0
$14.0
$16.0
-$2.0
Billion Dollars
US Exports US Imports Trade Balance
U.S. Agricultural Exports to NAFTA Countries,Pre- and Post-NAFTA
USDA, FATUS, Calendar Year.
$3.1$3.6
$4.5
$3.5
$5.4 $5.2
$6.2$5.6
$6.5
$4.6
$5.3 $5.5 $5.7$6.1
$6.8 $7.0 $7.1$7.7
1990-92 1993 1994(N1) 1995 1996 1997 1998 1999 2000(N7)$0.0
$2.0
$4.0
$6.0
$8.0
$10.0
Billion Dollars
Mexico Canada
US Agricultural Imports from NAFTA Countries,Pre- and Post-NAFTA
USDA, FATUS, Calendar Year.
$2.5 $2.7 $2.9
$3.8 $3.8$4.1
$4.7 $4.9 $5.1
$3.5
$4.6$5.2
$5.6
$6.8$7.5
$7.8 $8.0$8.7
1990-92 1993 1994(N1) 1995 1996 1997 1998 1999 2000(N7)$0.0
$2.0
$4.0
$6.0
$8.0
$10.0
Billion Dollars
Mexico Canada
U.S. Agricultural Trade Balance with NAFTA Countries, Pre- and Post-NAFTA
USDA, FATUS
$0.6
$0.9
$1.6
-$0.3
$1.6
$1.1
$1.5
$0.7
$1.5
$1.1
$0.7
$0.3$0.1
-$0.7 -$0.7 -$0.8-$0.9 -$1.0
1990-92 1993 1994(N1) 1995 1996 1997 1998 1999 2000(N7)
$0.0
$0.5
$1.0
$1.5
$2.0
-$0.5
-$1.0
-$1.5
Billion Dollars
Mexico Canada
U.S. Agricultural Exports to Mexico,Pre- and Post-NAFTA
USDA, FATUS, Calendar Year.
Meats Grains Oilseeds & Prod. Cotton Fruits&Veg$0
$500
$1000
$1500
$2000
$2500
Million Dollars
Avg. 1990-91 1994 (N1) 1995 (N2) 1996(N3)
1997 (N4) 1998 (N5) 1999 (N6) 2000(N7)
U.S. Agricultural Exports to Mexico,Pre- and Post-NAFTA
US Agricultural Imports from Mexico,Pre- and Post-NAFTA
Vegs. Fruits/Nuts Malt Bev. Coffee Cattle Sugar&Related
$0
$500
$1000
$1500
$2000
Million Dollars
Avg. 1990-91 1994 (N1) 1995 (N2) 1996 (N3)
1997 (N4) 1998 (N5) 1999 (N6) 2000(N7)
USDA, FATUS, Calendar Year.
Mexican Peso-US Dollar Exchange Rate
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Dec 91
Jun 92
Dec 92
Jun 93
Dec 93
Jun 94
Dec 94
Jun 95
Dec 95
Jun 96
Dec 96
Jun 97
Dec 97
Jun 98
Dec 98
Jun 99
Dec 99
Jun 00
Dec 00
4
6
8
10
12
Mexican Peso-US Dollar Exchange Rate
Free Trade Areaof the Americas
Free Trade Areaof the Americas
FTAACurrently being negotiated among 34 of 35 Western Hemisphere Nations (Cuba excluded)
Negotiations scheduled to conclude in 2005
Goal is to eliminate tariff and non-tariff barriers between the nations and increase trade
FTAA will consolidate many sub-regional agreements, such as NAFTA and MERCOSUR
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FTAA IssuesBrazil not as eager to negotiate FTAA as they once were (Publicly)
Economic turmoil in Latin America adding to difficulty of negotiations
U.S. generally has very low agricultural tariffs on imports from Latin America-GSP
Delay in WTO negotiations affecting FTAA
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U.S. Agricultural Trade withSouth America, 1990-2000
Source: Foreign Agricultural Trade of The United States , Calender Year, USDA/ERS
$1.1 $1.2$1.4 $1.5
$1.8
$2.3$2.6 $2.7 $2.6
$1.8 $1.7
$3.9 $3.7 $3.8 $3.6$4.1 $4.2
$4.8
$5.4$4.9
$5.3$4.8
1990 1995 2000$0.0
$1.0
$2.0
$3.0
$4.0
$5.0
$6.0
Billion Dollars
Exports to South America Imports from South America
U.S. Agricultural Exports to South America1990 and 2000
Source: USDA/ERS
Colombia11.2%
Venezuela 33.3%
Peru 15.1%
Brazil 16.6% Chile
5.9%
Argentina 2.6%
Ecuador 8.9%
Other6.3%
Colombia24.6%
Venezuela 23.8%
Peru 10.0%
Brazil 15.5%
Chile 6.7%
Argentina 8.9%
Ecuador 5.9%
Other 4.6%
1990 Total: $1.06 Billion 2000 Total: $1.71 Billion
U.S. Agricultural Imports from South America1990 and 2000
Source: USDA/ERS
Brazil40.1%
Colombia20.3%
Chile12.3%
Argentina10.0%
Ecuador12.4%
Peru2.3%
Other 2.7%
Brazil23.9%
Colombia23.5%
Chile21.4%
Argentina14.1%
Ecuador9.4%
Peru4.1%
Other3.5%
1990 Total: $3.90 Billion 2000 Total: $4.78 Billion
U.S. Competitive Agricultural Imports from South America, 1990 and 2000
Source: USDA/ERS
Chile21.1%Brazil
43.9%
Argentina15.7%
Colombia14.3%
Other5.0%
Chile31.8%
Brazil23.2%
Argentina18.8% Colombia
21.3%
Other5.0%
1990 Total: $2.27 Billion 2000 Total: $3.18 Billion
U.S. Non-Competitive Agricultural Imports from South America, 1990 and 2000
Source: USDA/ERS
Colombia28.5%
Brazil34.8%
Ecuador28.7%
Other8.1%
Colombia42.3%
Brazil25.4%
Ecuador19.1%
Other13.2%
1990 Total: $1.63 Billion 2000 Total: $1.60 Billion
FTAA Potential ImpactsU.S. agricultural exports to Western Hemisphere countries up 8% after first 5 years (up $580 million by 2010)
U.S. agricultural imports from Western Hemisphere countries up 6% after first 5 years (up $830 million by 2010)
Gains likely for U.S. corn, soybean and cotton exports
Possible negative impacts on U.S. sugar, peanut and FCOJ industries
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Emerging Issues inWestern Hemispheric
Agricultural Trade
Emerging Issues inWestern Hemisphere Agricultural Trade
Potential Road BlocksIncrease of Antidumping/Counterveiling Duty (AD/CVD) Petitions
Infrastructure issues in Latin America (Roads, Electricity, Cold Storage)
Resolution of NAFTA Trucking Provisions (Drayage)
Technical Barriers to Trade - ie Labeling and SPS issues
Delay in Negotiations
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Economic IssuesRecurring financial instablility in South America, esp. Argentina, Brazil and Ecuador
Limited economic growth and high interest and inflation rates
Exchange Rate and Dollarization Issues
Political instability aggravates economic issues
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Conclusions and ImplicationsNAFTA, FTAA and WTO Will Help Shape Trade Flows over the Next Decade
Income Growth and Infrastructure Improvements in Latin America Crucial
Opportunities and Challenges Continue
Economic and Political Issues are Critical
Trade Agreements Only One Factor Influencing U.S. Agriculture and Trade
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