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Proceedings of the Seventh Agricultural and Food Policy Systems Information Workshop

STRUCTURAL CHANGE AS A SOURCE OF TRADE DISPUTES UNDER NAFTA

Edited by R.M.A. Loyns Karl Meilke Ronald D. Knutson Antonio Yunez-Naude February 2002

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Proceedings of the Seventh Agricultural and Food Policy Systems Information Workshop

STRUCTURAL CHANGE AS A SOURCE OF TRADE DISPUTES UNDER NAFTAEdited by R.M.A. Loyns Karl Meilke Ronald D. Knutson Antonio Yunez-Naude February 2002

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NAFTA - Report Card on Agriculture

Edited by: R.M.A. Loyns Karl Meilke Ronald D. Knutson Antonio Yunez-Naude Page Layout/CoverDesign/DTP by: David P. Ernstes Agricultural and Food Policy Center, Texas A&M University Published by: Texas A&M University University of Guelph El Colegio de México Printedby: Friesen Printers Winnipeg Manitoba
Includes bibliographic references and earlier publication references. 1. Agricultural and Food Policy 2. Trade Agreements/Structural Change/Trade Disputes 3. Canada/Mexico/United States I. Loyns, R.M.A. III. Knutson, Ronald D. (Texas A&M) V. Friesen Printers (Winnipeg) II. Meilke, Karl (University of Guelph) IV. Yunez-Naude, Antonio (El Colegio de Mexico)All rights reserved. Readers are encouraged to use, quote and distribute this material freely. We request only that full citation of author and source be provided. The Policy Disputes Information Consortium and sponsors of the Workshop assume no responsibility beyond that of presentation, for views, opinions and conclusions expressed by authors, presenters and discussants. Printed in CanadaCopyright © 2002 ISBN Catalogue February 2002

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EXECUTIVE SUMMARY
TRADE LIBERALIZATION UNDER NAFTAREPORT CARD ON AGRICULTURE
The seventh Policy Disputes Information Consortium workshop, held in Tucson, Arizona, in February 2001, addressed the changes in market structure and trade that have occurred since the inception of the NAFTA agreement, and the relationship between those changes andtrade disputes. The workshop theme arose out of the realization that risk, fear, and uncertainty associated with structural change in agriculture could be an important contributor to lack of progress in achieving free trade in the NAFTA region. There have been substantial gains from NAFTA in terms of increased efficiency in production and distribution, and growth in trade. However, there appear tobe continuing concerns among farmers, laborers, and some agribusinesses that they will be reorganized or displaced, that production will be relocated, that economic rents that may have existed in a protected market will disappear, and that the nature of agriculture, including its institutions and culture, will be forever changed. There has also been an increase in the level of trade stress andnumber of trade actions in several areas. On the other hand, there are many farmers and agribusiness managers who view NAFTA as creating opportunities to adjust crop mixes and business operations into more profitable and more efficient configurations.

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NAFTA - Report Card on Agriculture

All of this has occurred in a trading environment governed by the set of agreements among the UnitedStates, Mexico and Canada referred to as the North American Free Trade Agreement (NAFTA). Experience has demonstrated that NAFTA is, at most, a limited “free trade” instrument as significant areas of regulation, government support and trade limitations were not dealt with in the NAFTA. In fact, the NAFTA has been described as never being intended to be a “free trade” arrangement, rather one toachieve greater trade among the member countries, and a method of deregulating some sectors. That description is consistent with the trading framework established by the agreement, and with its accomplishments. This situation does, however, raise interesting questions about how structure and trade would evolve if the agriculture and agri-food industries in the three countries were, in fact, subject to...
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