World Grain - April 2014 - 55

FEATURE: NAFTA TURNS 20

16
14

Million tonnes

12
10
8
6
4
2
2011-12

2010-11

2009-10

2008-09

2007-08

2006-07

2005-06

2004-05

2003-04

2002-03

2001-02

2000-01

1999-00

1998-99

1997-98

1996-97

1995-96

1994-95

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Mexico imports (USGC represented products)

1993-94

As well as U.S. trade between Canada
and Mexico, the U.S.'s two NAFTA partners have also fared well. For example, a
study by Jared Carlberg & James Rude1
at the University of Manitoba indicates
that agricultural trade has beneﬁted from
reduced tariff and non-tariff barriers to
trade between Canada and Mexico.
However, the study concluded that trade
between Canada and Mexico was somewhat different than trade with the U.S.
"Canada imports a wide variety of
fruits and vegetables from Mexico, but
its top import is beer, followed by tomatoes, guavas and mangos, peppers,
and avocados. Canada's leading exports
to Mexico are canola, wheat, beef cuts,
skim milk powder and canary seed.
"It can be cautiously concluded that
trade liberalization under NAFTA resulted in an increased two-way ﬂow of goods
between Canada and Mexico. Though
the speed at which market access is being
granted varies by commodity and to some
extent by country, it is clear that NAFTA
- perhaps on its own but certainly also
as a part of Mexico's trade liberalization
strategy - has played an important role
in increasing Canada-Mexico trade in agricultural products."
The study also noted: "Unlike agricultural trade between Canada and
the U.S. that increasingly consists of
roughly equal two-way ﬂows of similar
processed products, trade ﬂows between
Canada and Mexico are one-sided and
can be explained by conventional arguments of comparative advantage.
Mexico exports labor intensive goods
such as horticultural products, and
Canada exports land intensive products
such as grains and oilseeds."
At a Cargo Logistics Canada Expo and
Conference held in Vancouver, Canada,
Nov. 29-30, 2013, Luis Brasdefer, Trade
& Investment Commissioner for the
Mexican government, had little doubt
that a revitalized NAFTA agreement
will beneﬁt both Canada and Mexico.
In an interview with World Grain,
Brasdefer said: "There's a huge opportunity for Canada to diversify its exports,
but not only to Mexico. I think Canada

Total
Source: U.S. Grains Council

should see Mexico as a gateway for Latin
America. That's a potential market of
580 million people. It's not about changing markets, it's about diversifying.
"Today, the Mexican government
is spending a huge amount of money

on infrastructure. The gate is open for
Canadian companies, with all the technology, knowledge and expertise they
have, to make logistics more efﬁcient and
more competitive. I can think of three or
four multiports and seaports that are being developed in Mexico that could be
very attractive to Canadian companies."
Brasdefer also said the advancements that have been made in constructing highways for truck cargo
between Canada and Mexico and the
routes Canadian railways, particularly
Canadian National Railway, have developed between Canada and the Mexican
border have created major trade corri-

dors into that country and, from there,
into South America.
Laura Dawson of Ottawa-based consulting group, Dawson Strategic, said
in a recent statement: "In Canada, the
Canadian Council of Chief Executives
has taken the lead in rallying businesses
in all three countries around the issue of
deepened integration. I am convinced
that it is time for action."
While North/South trade has increased
dramatically on the North American
continent as the tariff reductions contained in NAFTA were rolled out, the
consensus in most quarters seems to be
that the leaders of all three governments
should think about giving trade negotiations a healthy prod, she said.
A REVITALIZED NAFTA
It's difﬁcult to know what might come
out of the next round of NAFTA discussions such as the NAFTA Next Summit
to be held at the Palmer House Hotel,
Chicago, Illinois, U.S., April 22-25. The
changes could amount to little but minor
tinkerings or sweeping changes to the
way North Americans do business. Or,
as some have suggested, NAFTA could
be swallowed up into the Trans-Paciﬁc
Partnership agreement that is now being
negotiated between Paciﬁc Rim countries.
To understand where North America's
leaders stand, perhaps the most informa55

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World Grain - April 2014

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