By Dale Colyer

U.S. agricultural trade with Mexico and Canada has increased since the implementation of the North American Free Trade Agreement (NAFTA). While NAFTA is primarily concerned with trade, environmental issues became an important factor in gaining support for its approval and, while covered to an extent in the main treaty, a side agreement–the North American Agreement on Environmental Cooperation (NAAEC)–was developed to further address those concerns. A result of this agreement was the creation of the Commission on Environmental Cooperation (CEC) with membership from Canada, Mexico and the United States. This was the first time that environmental issues became an important component of an international trade liberalization agreement.

This paper examines the environmental impacts of agricultural trade utilizing the CEC’s framework and related approaches. It focuses on U.S.-Mexico trade and impacts on the Mexican environment.

The paper concludes that the impacts are on the environment are mixed. Comparative advantage is promoting economic efficiency but changes in land and water use, chemicals, fertilizers and pesticides are having some adverse impacts in Mexico, with, perhaps some offsetting favorable impacts in the United States.

Improved technology from increased investment, especially in food processing, probably has produced some positive environmental impacts in Mexico, while the greater attention to environmental issue that resulted from the inclusion of environmental issues in the NAFTA agreements has been positive. Mexico has become more aware of environmental issues and problems and has improved its legal and regulatory mechanisms for handling environmental problems and expenditures for pollution abatement have increased. It also appears to have increased enforcement procedures to make its existing regulatory framework more effective.

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