North American Free Trade Agreement (NAFTA)
What's the Background?
When it took effect Jan. 1, 1994, NAFTA created the world’s largest free trade area, encompassing 450 million people and a GDP of more than $20 trillion and giving the three NAFTA nations a greater economic output than the 28-country European Union. Under the terms of the deal, tariffs on most products traded between the United States, Canada and Mexico were eliminated. Since NAFTA implementation, U.S. trade with Canada and Mexico has more than tripled, growing more rapidly than U.S. trade with the rest of the world. These countries are the two largest destinations for U.S. goods and services, accounting for more than one-third of total U.S. exports.
Why Does it Matter to our Producers?
The United States over the past 10 years, on average, has been the top 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 and these exports contribute significantly to the bottom line for all U.S. pork producers. Exports added $50 – representing 36 percent of the $140 average value of a hog – to every U.S. hog marketed in 2016, when $5.9 billion of U.S. pork was exported. Mexico and Canada are particularly important export markets.
What's NPPC's Position?
The North American Free Trade Agreement (NAFTA) has been a tremendous success for U.S. pork producers. Any disruption in sales to either Canada or Mexico will cause severe financial dislocations for the U.S. pork industry. The United States must maintain zero-duty market access into Canada and Mexico. Withdrawing from NAFTA would cost the U.S. pork industry $1.5 billion.