Impact of NAFTA on U.S. and Mexican Sugar Markets

Abstract

When NAFTA became fully implemented for sugar in 2008, Mexico became the leading sugar exporter into the United States, accounting for nearly 70% of U.S. imports in 2013. A partial equilibrium trade model was developed to estimate the welfare implications of NAFTA for U.S. and Mexican sugar markets from 2008 to 2013. While the net effect of NAFTA on U.S. welfare and Mexican sugar producers was positive, U.S. sugar producers suffered significant losses. The net Mexican welfare effect of NAFTA was significantly positive in 2011, negative in 2008, and slightly positive in 2009Ð2010 and 2012Ð2013.

Keywords

• mexico
• north american free trade agreement
• producer surplus
• sugar
• trade policy
• welfare economics