REPERCUSSIONS TO THE MEXICAN AGRICULTURAL SECTOR WITH THE FREE-TRADE AGREEMENT

At present, and regarding the condition of the international market, the North American Free Trade Agreement (NAFTA) will be unfavourable to Mexico in the national accounts (trade and payment balance). Products such as basic grains, vegetable oils, milk, beef and poultry products in the USA and Canada have a lower production cost than Mexico. This condition is caused by the lack of symmetry between the trading countries due to productivity aspects, availability, provision of natural resources and due to the exagerated governmental subsidy to American and Canadian farmers. It is necessary to be cautious about signing the NAFTA at the present circumstances, because Mexico could suffer unemployment and therefore, face serious social problems. Mexico has to combine strategies in short, medium and long terms to start benefiting from the NAFTA.