Download Mexico and NAFTA - National Pork Producers Council

Mexico and NAFTA
NPPC POSITION: NPPC, which supported implementation of the North American Free Trade
Agreement (NAFTA), would be supportive of improving the 23-year-old pact among the United
States, Canada and Mexico. The organization would support updating and improving the
NAFTA as long as duties on U.S. pork remain at zero and pork exports are not disrupted.
IMPORTANCE: The United States over the past 10 years, on average, has been the No. 1
exporter of pork in the world; it is the globe’s lowest cost producer of pork. In any given year,
the U.S. pork industry ships product to more than 100 countries. Exports contribute significantly
to the bottom line of all U.S. pork producers, adding more than $48 to the value of each hog
marketed in 2015, when $5.6 billion of U.S. pork was exported. In 2015, the United States
exported more than 718,000 metric tons of pork and pork products, valued at $1.26 billion, to
Mexico, making it the largest volume market and the second largest value market for U.S. pork
exports. According to Iowa State University economist Dermot Hayes, U.S. pork exports to
Mexico have created more than 9,000 U.S. jobs. Loss of the Mexican market would be
cataclysmic for the U.S. pork industry.
BACKGROUND: NAFTA took effect Jan. 1, 1994, and under the terms of the deal, which were
implemented gradually through January 2008, tariffs on most products traded among the United
States, Canada and Mexico were eliminated. The agreement created the world’s largest free trade
area, with 450 million people and a GDP of more than $20 trillion. The three NAFTA nations
have a greater economic output than the 28-country European Union. Since implementation of
NAFTA, U.S. trade with Canada and Mexico has more than tripled, growing more rapidly than
U.S. trade with the rest of the world. The countries are the two largest destinations for U.S.
goods and services, accounting for more than one-third of total U.S. exports. NAFTA has added
$80 billion to the U.S. economy, and U.S. exports to Canada and Mexico support more than 3
million American jobs. In fact, U.S. manufacturing exports to Canada and Mexico have
increased nearly 260 percent over the past 23 years, and U.S. farm exports to the countries have
grown by 156 percent. For services and many other categories of goods, the United States
maintains a trade surplus with the NAFTA countries. The biggest factor affecting the U.S. trade
balance with Canada and Mexico is the importation of fossil fuels and their byproducts. If those
products were excluded, there would be no trade deficit. While imports from Canada and Mexico
to the United States have increased under NAFTA, nearly 60 percent of those imports are used in
the production of American-made goods. For the U.S. pork industry, NAFTA helped
significantly boost exports to Mexico, which now is the largest volume market for U.S. pork and
the No. 2 value market. Disruption of the Mexican market would cause severe economic
consequences for U.S. pork producers.
NPPC CONTACT: Nick Giordano, Vice President and Counsel; Maria Zieba, Deputy Director
of International Affairs, (202) 347-3600.
December 2016