Trade between Canada and Mexico has increased significantly since the implementation of the North American Free Trade Agreement (NAFTA) between the United States (US), Canada and Mexico in 1994.
Mexico has become Canada’s fourth largest agriculture and agri-food export market and Canada is now the third largest market for Mexico exports. For 2004-2005, Canadian agri-food exports to Mexico were $995 million versus imports from Mexico of $635 million. According to the Bi-weekly Bulletin of Ag Canada, Mexico has the sixth largest agricultural sector in the Organization for Economic Co-operation and Development (OECD), which it joined in 1994. Corn and beef are its main agricultural commodities. Primary agriculture still accounts for 6 percent of Gross Domestic Product (GDP), compared to 2 percent in Canada and the US. More importantly, the agricultural sector employs 19 percent of the work force compared to 5 percent in Canada and 3 percent in the US.
Since 1993, the last year before NAFTA came into force, Canadian agri-food exports to Mexico increased significantly. Similarly, Mexican farmers have benefited from improved trade with Canada, as our imports from Mexico have grown significantly from 1993 to 2003. Over that period, the value of Canada’s agricultural trade surplus with Mexico has also increased. Canada’s most important agri-food exports to Mexico are canola seed, beef and wheat. Significant imports from Mexico include vegetables, fruit, coffee and beer.
By January 1, 2003, Mexico had eliminated tariffs on virtually all agri-food products, as scheduled under the NAFTA. With this stage of tariff elimination, most Canadian agri-food products now have duty-free access to the Mexican market.