Regional Paper

The North American Free Trade Agreement (NAFTA) has been a major force in increasing the agricultural trade among the United States, Mexico, and Canada. 1989 was the implementation year for the North American Free Trade Agreement.

Integrating the markets has had a great effect on each country by increasing its market shares in the regional economy. There still needs to be additional phases to improve equality under the NAFTA agreement. The integration of foreign markets exists when products are transferred on the same and equal terms and conditions as they would if they were traded within a country. The basic difference in the cost of the product between each country is the transportation costs and to move the product for a greater distance. The private sector helps market integration by their business activities from trading and foreign direct investment. Removing obstacles for the private sector is the role of the government to make it easier and more integrated. The advantages given to a country by market integration is competition and increased trading of consumer goods and/or services.

Market integration does have definite disadvantages but the advantages greatly outweigh any costs that can arise from market integration. An example of this disadvantage would be fruit growers in the United States having to adjust to the increased imports of fruits and vegetables from Mexico. The advantage of this agreement is that it gives the United States a new exportable product like feed grains and live stock products to Mexico. This makes Mexico have to adjust to the increased pig and poultry that is supplied from the United States. This demonstrates that market integration by showing the benefits that weigh heavily on the plus side.

From the years 1993 to 2002 a total trade between the United States, Mexico, and Canada has increased 37% during this period of time. This is in comparison to the rest of the world which shows only an increase of