151 



James A. Graham, Commissioner, North Carolina Department of Agriculture 

 Fred L. Dailey, Director, Ohio Department of Agriculture 

 Bruce Andrews, Director, Oregon Department of Agriculture 

 Neftali Soto-Santiago, Secretary, Puerto Rico Department of Agriculture 

 John M. Lawrence, III, Commissioner, Rhode Island Division of Agriculture, Depart- 

 ment of Environmental Management 

 D. Leslie Tindal, Commissioner, South Carolina Department of Agriculture 

 Jay C. Swisher, Secretary, South Dakota Department of Agriculture 

 L.H. "Cotton" Ivy, Commissioner, Tennessee Department of Agriculture 

 Rick Perry, Commissioner, Texas Department of Agriculture 

 Cary C. Peterson, Commissioner, Utah Department of Agriculture 

 George M. Dunsmore, Commissioner, Vermont Department of Agriculture, Food and 



Markets 

 Gus R. Douglass, Commissioner, West Virginia Department of Agriculture 

 Alan T. Tracy, Secretary, Wisconsin Department of Agriculture, Trade and 



Consumer Protection 

 Don Rolston, Director, Wyoming Department of Agriculture 



KEY PROVISIONS OF NAFTA 



NAFTA includes separate bilateral agreements in agricultural trade between the 

 United States and Mexico and between Canada and Mexico. In general, the rules 

 of the U.S. -Canada Free Trade Agreement, implemented in 1989, will continue to 

 apply to agricultural trade between the United States and Canada. Key provisions 

 of NAFTA for U.S. -Mexico trade include: 



• Elimination of nontariff barriers — When NAFTA goes into effect, the United 

 States and Mexico will immediately eliminate all nontariff barriers to agricultural 

 trade, generally through their conversion to tariff rate quotas (TRQs) or ordinary 

 tariffs. 



• Elimination of tariffs — With the implementation of NAFTA, the United States 

 and Mexico will immediately eliminate tariffs on a broad range of agricultural prod- 

 ucts, with most tariffs eliminated within 10 years. Duties on a few highly sensitive 

 products will be phased out over 15 years. 



• Special safeguard provisions — During the first 10 years that NAFTA is in ef- 

 fect, a special safeguard provision will apply to certain products. A designated quan- 

 tity of imports will be allowed at a NAFTA preferential tariff rate. Once imports 

 exceed the designated quantity, the importing country may apply the tariff rate in 

 effect at the time NAFTA is implemented or the then-current most-favored-nation 

 rate, whichever is lower. The United States can apply the special safeguard to sea- 

 sonal imports of fresh tomatoes, eggplant, chili peppers, squash, watermelons, and 

 onions. 



• Country -of -origin rules — NAFTA increases incentives for buying within the 

 NAFTA region and ensures that Mexico will not serve as a platform for exports from 

 other countries to the United States. Under NAFTA, only North American producers 

 can obtain the benefits of the tariff preferences. Non-Mexican origin commodities 

 must be transformed or processed significantly in Mexico so that they become Mexi- 

 can goods before they can receive the lower NAFTA duties for shipment to the Unit- 

 ed States. 



nafta's impact on agriculture 



The most significant trade expansion from NAFTA will be with Mexico, already 

 U.S. agriculture's third largest country market. With the elimination of all tariffs, 

 quotas, and licenses that are barriers to agricultural trade, economic growth — espe- 

 cially in Mexico — will be expanded. Mexico's economic growth, projected to increase 

 annually by at least 0.5 percent, will lead to increased demand for food and agricul- 

 tural products. NAFTA provisions affecting agricultural trade between the United 

 States and Mexico will result in net gains for both countries. NAFTA will: 



• Lock in recent gains — U.S. agricultural exports to Mexico have grown signifi- 

 cantly since the mid-1980s, rising from $1.4 billion in 1986 to $3.5 billion (prelimi- 

 nary) in 1992. The export growth is largely the result of unilateral liberalization in 

 Mexico, the natural comparative advantages of the two countries, and relatively 

 strong Mexican economic performance. NAFTA will assure that this growth in U.S. 

 agricultural exports to Mexico will continue by providing improved market access 

 and preventing a return by Mexico to policies that limit trade and economic growth. 



• Assures a larger market — Mexico's population (about 92 million), which is grow- 

 ing at more than 2 percent a year and becoming increasingly urbanized, represents 

 a significant market for U.S. agricultural products. Improved economic activity re- 



