Opportunities for Making U.S.-Mexico Agricultural Trade More Agile

As part of the North American Free Trade Agreement (NAFTA), Mexico and the United States gradually eliminated all tariffs and quotas governing bilateral agricultural trade during a 14-year transition period that lasted from January 1, 1994 to January 1, 2008.1 Prior to NAFTA, this trade was subject to import tariffs that averaged about 5.7 percent on a trade-weighted basis (Burfisher et al., 1992),2 and bilateral agricultural trade faced many formidable barriers. For instance, Mexico required import licenses for a subset of commodities (including corn, wheat, barley, and dry beans) accounting for about one-quarter of the value of U.S. agricultural exports to Mexico (Link and Zahniser, 1999), while the United States maintained higher seasonal import tariffs on Mexican fruit and vegetables during the parts of the year when they competed with U.S. produce in the marketplace.

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