Canada - Mexico Agricultural Economies and Trade Under Closer North American Relations

Continued expansion of economic and security relations between Canada, United States, and Mexico are expected in the years to come. The United States is by far the largest export market for both Canada and Mexico with each nation exporting over 80% of their products to this large economy. However, trade between Canada and Mexico has also grown significantly since the implementation of the North American Free Trade Agreement (NAFTA) a decade ago. The two-way trade between Canada and Mexico has more than doubled from Cdn $6.5 billion in 1995 to Cdn $15.1 billion in 2002, according to official Statistics Canada trade statistics. A recent merchandise trade reconciliation study undertaken between Statistics Canada and a Mexican Working Group on Foreign Trade Statistics has determined that the two-way trade was closer to Cdn $19 billion in 2001. This result ranks Canada as Mexico's second most important export market and ranks Mexico as Canada's fourth most important export market in 2001. In comparison, Mexico was ranked as Canada's 15th most important export market in 1995. This research study provides an overview of the trading relationship between Canada and Mexico with particular emphasis on agricultural trade. Approximately one-fifth of Canadian exports to Mexico are agricultural goods. Therefore, it is important to both countries that awareness is generated as to the nature of our bi-lateral trade and the changing socio-economic conditions that will enhance or hinder our trading relationship.