USDA REPORTS POSITIVE NAFTA IMPACT ON U.S. AGRICULTURE
                                            Release No. 0296.97
                                                               
                                                               
                                   Jim Petterson (202) 720-4623
                                            jpetterson@usda.gov



USDA REPORTS POSITIVE NAFTA IMPACT ON U.S. AGRICULTURE

     WASHINGTON, DC, August 28, 1997--The North American Free Trade
Agreement (NAFTA) has had a positive effect on U.S. agriculture, helping to
boost U.S. agricultural exports to Mexico and Canada $2.7 billion in three
years, according to a new U.S. Department of Agriculture (USDA) report sent
to Congress today.

     During 1993-96, U.S. agricultural exports to Mexico and Canada rose
from $8.9 billion to $11.6 billion.  U.S. agricultural imports from the two
NAFTA partners grew from $7.3 billion to $10.5 billion.

     "Today's report confirms that NAFTA is working," Agriculture Secretary
Dan Glickman said.  "Even at this relatively early stage in its
implementation, it has increased access for a broad range of U.S. farm and
food products going into Canada and Mexico, boosting U.S. sales and U.S.
market share.  It kept Mexican markets open to U.S. products during that
country's economic crisis, and helped spur a rapid recovery in our exports. 
It is creating opportunities that U.S. producers need if they are to compete
and prosper in world markets.

     "The Agreement has not resolved all of our trade issues with Mexico
and Canada, and we continue to pursue solutions," Glickman said.  "However,
we cannot overlook the fact that combined U.S. agricultural exports to our
two NAFTA partners are now on a par with sales to Japan and are
substantially greater than sales to the entire European Union."

     NAFTA is a long-term agreement, with implementation periods of up to
15 years for some commodities.  After three years under NAFTA, many tariffs
between the United States and Mexico have already been eliminated, and most
of the remaining tariffs have declined more than one-third.  Most tariffs
between the United States and Canada will be eliminated on January 1, 1998.

     Mexico is a rapidly growing market for U.S. agriculture, averaging
14.8 percent growth per year since 1993, compared with 12.4 percent average
growth for all U.S. agricultural exports.  In the mature Canadian market,
U.S. agricultural exports have averaged 5.2 percent annual growth since
1993.

     "Of course, NAFTA is only one of many factors that has influenced
North American agricultural markets in recent years," Glickman said.  "The
United States, Mexico, and Canada have all adopted fundamental domestic
agricultural policy reforms.  These reforms have affected some North

      American agricultural markets in ways that are difficult to separate
from the direct effects of NAFTA trade terms.  In addition, weather-related
production shortfalls, domestic agricultural policy changes, income growth,
and changing technology all contributed to the growth in trade."      

     USDA's Economic Research Service will publish the report in its
International Agriculture and Trade Reports series.  Biennial reports,
beginning this year, on the effects of NAFTA are required under the NAFTA
Implementing Legislation of 1993.
                                
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