CAB - Report tracks trade flow into Mexico

- Spring 1996 "Update" Newsletter Article -
Report tracks trade flow into Mexico
Post-NAFTA survey shows Mexico's transportation infrastructure has accommodated increased flow of deciduous fruits from the United States
From CATI Publication #960401
Copyright © 1996. All rights reserved.

Questions from all sectors of the American business community were raised during 1993 discussions of the proposed North American Free Trade Agreement (NAFTA).

In university settings, such as at California State University, Fresno's Center for Agricultural Business (CAB), economists were interested and ready to track the results of the new accord, which took effect Jan. 1, 1994. One of the key queries posed by a pair of CAB researchers in advance of NAFTA was, "Will Mexico's transportation infrastructure be capable of supporting a significant increase in imports from the U.S.?"

This question was raised as a result of 1993 study conducted by agricultural economics professors Juan Batista and John Hagen. Their research showed that Mexico's population was growing rapidly in purchasing power; however, the country's restrictions on U.S. truck movement inside its borders, shortages of warehouse space, and a limited number of high-quality roads were seen as possible hindrances to a greater flow of California products. This was in spite of the fact that NAFTA would remove tariffs and other regulations that had limited trade in the past.

Since then Batista has conducted follow-up research, and the preliminary data indicate that Mexican transportation systems have indeed been able to accommodate a greater flow of U.S. goods. In fact, the data show the Mexican marketplace absorbed from 18 percent to 170 percent increases in the volume of fresh deciduous fruits imported from the U.S. in 1994.

Of the six deciduous fruits studied, all showed volume increases from 1993 to 1994, according to the U.S. Department of Agriculture's Foreign Agricultural Service. Grapes showed the greatest percentage change, 170 percent, with the volume from the U.S. to Mexico jumping from 9,000 metric tons in 1993 to more than 24,000 in 1994.

The largest actual volume increase was in apples, with Mexico importing 108,000 tons in 1993 and 153,000 in 1994. In peaches, imports from the U.S. to Mexico more than doubled, from 6,280 metric tons in 1993 to more than 16,000 in 1994. Volume of pears jumped from 38,653 metric tons in 1993 to 65,112 in 1994. Apricot trade increased from 1,533 to 3,718 tons, and plum figures rose from 3,004 to 3,552 metric tons.

Batista's current report, entitled "Mexico's Distribution Infrastructure for Fresh Deciduous Fruits After the North American Free Trade Agreement," is co-authored by Lic. Jose Armando Martinez, a member of the faculty of business administration and accountancy at the University of Guanajuato in Guanajuato, Mexico, and Antonio Soto, a graduate research assistant at Fresno State.

In addition to obtaining actual sales and volume figures for fresh deciduous fruits, the team addressed an assortment of trade issues in its surveys of "major players" in the import/export business, including more than 50 Mexican trade agents.

Issues discussed in the report include marketing channels for imported fresh fruits into Mexico; trade corridors and ports of entry; modes of transportation; time in transit; costs of transport; border crossing and customs; trade protocol; market channels and facilities; and infrastructure improvements.

The report may be obtained free of charge from the California Agricultural Technology Institute, which supported the survey project along with the U.S. Department of Agriculture. To request a copy, see the Publications Available form on Page 7.

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