U.S.-Mexico Trade:

Impact of Liberalization in the Agricultural Sector

NSIAD-91-155: Published: Mar 29, 1991. Publicly Released: Apr 25, 1991.

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Pursuant to a congressional request, GAO: (1) examined efforts to remove impediments to agricultural trade between the United States and Mexico; (2) explored the benefits of increasing such trade; (3) reviewed remaining barriers to be addressed in free-trade agreement negotiations; and (4) obtained the views of U.S. producer groups on agricultural trade liberalization.

GAO found that between 1980 and 1990, the: (1) U.S. and Mexican governments undertook a series of bilateral and unilateral actions that reduced or removed many barriers to agricultural trade; (2) United States provided opportunities for Mexican exports under such programs as the General System of Preferences; (3) Mexican government liberalized trade by removing most import licensing requirements and substantially reducing tariff rates; and (4) United States and Mexico benefitted from increased bilateral agricultural trade, primarily due to complementary production and comparative advantage. GAO also found that: (1) free-trade negotiations would likely focus on the eventual elimination of all tariffs, but would also address nontariff barriers; (2) U.S. plant and animal health requirements restricted imports of many Mexican agricultural products, while Mexico's import licensing system was a major obstacle to U.S. agricultural exports; (3) inadequate infrastructure and border processing problems posed difficulties for both countries; (4) U.S. fresh fruit and vegetable growers feared strong competition as a result of a free-trade agreement, while such U.S. agroindustrial groups as grain and oilseed producers expected to benefit from further trade liberalization with Mexico; and (5) U.S. agricultural industry spokesmen generally supported increased trade liberalization, but insisted on establishing full access to Mexican markets, without the burden of regulatory requirements that their Mexican competitors did not face.

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