New Report Examines Potential Economic Impact of NAFTA Withdrawal for U.S. AgricultureTuesday, November 21, 2017
(North American Meat Institute)
The U.S. agriculture industry would likely face higher tariffs and reduced market share in Canada and Mexico if the Administration withdraws from the North American Free Trade Agreement (NAFTA), according to a new Congressional Research Service (CRS) report . The report examines the potential economic effects to agricultural markets of a NAFTA withdrawal, assuming the three countries revert to most-favored-nation (MFN) tariff rates.
The application of MFN tariffs on U.S. agricultural imports would likely raise prices both to U.S. consumers and other end users, such as manufacturers of value-added food products, according to the study. Moreover, MFN tariffs on U.S. agricultural exports - including meat products - would make U.S. products more costly and less competitive in Canada and Mexico, which could result in reduced quantities sold. Additional trade impacts of a U.S. withdrawal from NAFTA could include higher prices for imported products from Canada and Mexico, reductions in agricultural imports that compete with U.S. products, disruption of integrated supply chains and general market disruption and uncertainty, according to CRS. The report posits leaving NAFTA would diminish the U.S.'s leverage in future trade negotiations.share on facebook share on twitter