According to a new report by USDA, ag imports from Latin America and the Caribbean (LAC) have increased significantly over the past 12 years after the Great Recession, with a compound annual growth rate of 6.9%.
This growth is considerably higher than the global rate of 5.6%, and Mexico, in particular, has been a major contributor to this trend.
The report states that U.S. ag imports from Mexico grew faster than imports from nearly all other countries in the LAC, resulting in Mexico’s share in U.S. ag imports from the region rising from 44.1% to 58.2%.
Consequently, Mexico ranks as the leading source of U.S. ag imports, and stands as the largest food and ag trade partner with the U.S., with two-way trade predicted to reach $74.7 billion in the fiscal year ending September 30.
What the NAFTA Numbers Show
The report highlights the growing importance of Mexico in U.S. food and ag trade since the 1994 initiation of the North American Free Trade Agreement (NAFTA).
In the years after the Great Recession and before the pandemic, ag imports from the LAC made up about 37.9% of total U.S. ag imports, representing a 5-point increase. Mexico’s share of total imports was 22.2% in fiscal 2020, and is projected to reach 23.3% this year, based on USDA data.
Primary imports from the LAC were consumer-oriented products, making up $8 out of every $10 at the start of this decade, up from $7.20 at the end of the Great Recession. Mexico supplied the top five products including fresh berries, tequila, fresh avocados, beef and beef products, and beer.
There have been concerns raised about the availability of farm labor in the U.S compared to Mexico, which is especially relevant for labor-intensive.
