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7 

 Trade Agreements 



Expanding trade is an important priority to U.S. 

 agriculture, which exports nearly a fifth of its annual output. 

 With most of the global population growth occurring outside the 

 United States, our future market opportunities are clearly 

 abroad. Reductions in agricultural trade barriers are necessary 

 for U.S. producers to compete effectively in the global 

 marketplace. As trade barriers are reduced, trade expansion 

 results both from greater market access and enhanced income 

 growth. 



The North American Free Trade Agreement (NAFTA) will create 

 export opportunities in Mexico for U.S. producers. Effects will 

 be limited for U.S. agriculture at first. After full 

 implementation, USDA analysts indicate NAFTA is expected to boost 

 annual U.S. agricultural exports by $2 billion. A Uruguay Round 

 agreement based on the Dunkel Text and the U.S. -EC agreement 

 reached in November is projected to increase annual U.S. farm 

 exports by $4 billion and boost fa.. .■ income by $1 billion per 

 year after full implementation. In addition, significant gains 

 are also anticipated early in the agreement period. Although the 

 U.S. -EC agreement which resolved differences on export subsidies 

 and internal support is an important step toward moving the 

 Uruguay Round to completion, there remain important unresolved 

 issues on market access. 

 Income and Finance Prospects 



Developments in the commodity markets have stabilized 

 agriculture's income and financial position over the past several 



