Focus too much on the challenging issues that have faced North American agriculture over
the past several years and you might not notice an important long-term development: the agricultural
economies of Canada, Mexico, and the United States are increasingly behaving as if they
form one market. Not only is U.S. agricultural trade with Canada and Mexico on a clear upward
trend, but firms are reorganizing their activities around continental markets for both inputs and
outputs. For example, many North American pastures and feedlots contain animals that have
lived in more than one NAFTA country, and U.S. consumers are purchasing fresh tomatoes and
peppers produced by their neighbors both to the south and to the north.
Trade liberalization under the Canada-U.S. Free Trade Agreement (CFTA, implemented in
1989) and the North American Free Trade Agreement (NAFTA, implemented in 1994) is just
one factor behind the growing integration of North American agriculture. To encourage this
trend, decisionmakers in both government and the private sector have pursued greater institutional
and policy coordination. Structural changes within agriculture have also facilitated
integration, as have continued population growth and sustained periods of economic expansion,
which have boosted consumer demand and forced new economic arrangements within
the agricultural and processed food industries.