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The effects on intraregional agricultural trade of ending NAFTA's market access provisions

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  • Jayson Beckman
  • Steven Zahniser

Abstract

This paper explores the possible effects on agriculture of ending the market access provisions of the North American Free Trade Agreement (NAFTA). This paper considers two hypothetical scenarios: one revolving around a fallback to most‐favored‐nation (MFN) tariff rates and the other considering the additional effect of increased transaction costs in intraregional trade. Results from a computable general equilibrium model indicate that applying MFN tariff rates to U.S.–Canada and U.S.–Mexico agricultural trade would lead to a 14.43% reduction in these trade flows, while a scenario also featuring higher transaction costs would bring an even larger reduction (21.25%). In both scenarios, almost every agricultural product experiences a reduction in bilateral trade, with U.S. agricultural exports to Mexico undergoing some of the largest proportionate decreases. Many sectors within North American agriculture would have lower output, including fruit and nuts, vegetables, oilseeds and vegetable oils, and processed foods in Canada; fruit, vegetables, and beef in Mexico; and poultry meat, pork, beef, and dairy products in the United States. Cet article explore les effets possibles sur l'agriculture de la fin des dispositions relatives à l'accès aux marchés de l'Accord de libre‐échange nord‐américain (ALENA). L'article examine deux scénarios hypothétiques: l'un s'articule autour d'un repli sur les taux de droits de la nation la plus favorisée (NPF) et l'autre, prend en compte l'effet supplémentaire de l'augmentation des coûts de transaction dans les échanges intrarégionaux. Les résultats d'un modèle d’équilibre général calculable indiquent que l'application des taux de droits NPF au commerce agricole États‐Unis‐Canada et États‐Unis‐Mexique entraînerait une réduction de 14,43% des flux commerciaux, tandis qu'un scénario comportant des coûts de transaction plus élevés indique une réduction des flux commerciaux encore plus grande de 21,25%. Dans les deux scénarios, presque tous les produits agricoles subissent une réduction des échanges bilatéraux, avec les exportations agricoles américaines vers le Mexique subissant parmi les réductions proportionnelles les plus grandes. Plusieurs secteurs de l'agriculture nord‐américaine produiraient moins avec l'abandon de l'ALENA, incluant les secteurs des fruits, des noix, des légumes, des oléagineux, les huiles végétales et les aliments transformés au Canada; Les secteurs des fruits, des légumes et du bœuf au Mexique; et les secteurs de la viande de volaille, du porc, du bœuf et des produits laitiers aux États‐Unis.

Suggested Citation

  • Jayson Beckman & Steven Zahniser, 2018. "The effects on intraregional agricultural trade of ending NAFTA's market access provisions," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 66(4), pages 599-612, December.
  • Handle: RePEc:bla:canjag:v:66:y:2018:i:4:p:599-612
    DOI: 10.1111/cjag.12188
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    File URL: https://doi.org/10.1111/cjag.12188
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    References listed on IDEAS

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    1. Karen M. Huff & Karl D. Meilek & Roberto Amedei, 2000. "Canada-United States Chicken Trade: A Re-Evaluation," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 48(4), pages 421-432, December.
    2. Beckman, Jayson & Arita, Shawn & Mitchell, Lorraine & Burfisher, Mary, 2015. "Agriculture in the Transatlantic Trade and Investment Partnership: Tariffs, Tariff-Rate Quotas, and Non-Tariff Measures," Economic Research Report 212886, United States Department of Agriculture, Economic Research Service.
    3. Jayson Beckman & R. Keeney & W. Tyner, 2011. "Feed demands and coproduct substitution in the biofuel era," Agribusiness, John Wiley & Sons, Ltd., vol. 27(1), pages 1-18, Winter.
    4. Ryan Cardwell & Chad Lawley & Di Xiang, 2015. "Milked and Feathered: The Regressive Welfare Effects of Canada's Supply Management Regime," Canadian Public Policy, University of Toronto Press, vol. 41(1), pages 1-14, March.
    5. Juanita Rafajlovic & Ryan Cardwell, 2013. "The Effects of a New WTO Agreement on Canada's Chicken Market: A Differentiated Products Modeling Approach," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 61(4), pages 487-507, December.
    6. Pascal L. Ghazalian, 2017. "The Effects of NAFTA/CUSFTA on Agricultural Trade Flows: An Empirical Investigation," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 65(2), pages 219-248, June.
    7. Wainio, John & Dyck, John & Meade, Birgit Gisela Saager & Mitchell, Lorrarine & Zahniser, Steven & Arita, Shawn & Beckman, Jayson F. & Burfisher, Mary E., 2014. "Agriculture in the Trans-Pacific Partnership," Economic Research Report 188429, United States Department of Agriculture, Economic Research Service.
    8. Arita, Shawn & Beckman, Jayson & Mitchell, Lorraine, 2017. "Reducing transatlantic barriers on U.S.-EU agri-food trade: What are the possible gains?," Food Policy, Elsevier, vol. 68(C), pages 233-247.
    9. Karl Meilke & Erna Duren, 1996. "The North American Free Trade Agreement and the Canadian Agri-Food Sector," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 44(1), pages 19-37, March.
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    1. Julián Tole Martínez, 2019. "Colombia entre los TLC y la OMC: ¿liberación o administración del comercio internacional?," Books, Universidad Externado de Colombia, Facultad de Derecho, number 1139.

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