NAFTA Trade Flows General Agriculture and the Food Industry

NAFTA Report Card - Food Industry NAFTA Report Card - Food Industry

NAFTA Trade Flows General Agriculture

and theFood Industry

NAFTA Trade Flows General Agriculture

and theFood Industry


Objectives - Food IndustryObjectives - Food Industry

Eliminate barriers to trade and Eliminate barriers to trade and facilitate cross-border movement of facilitate cross-border movement of

goods and services.goods and services.

andand

Increase substantially investment Increase substantially investment opportunities in their territories.opportunities in their territories.


Commentary - ObjectivesCommentary - Objectives

As a result of the NAFTA, the food As a result of the NAFTA, the food industry in all 3 countries has had no industry in all 3 countries has had no choice but to find ways to be choice but to find ways to be competitive, now that trade is competitive, now that trade is essentially unrestricted and industry essentially unrestricted and industry investments can be made on a North investments can be made on a North American or global basis.American or global basis.


Commentary - ObjectivesCommentary - Objectives

The agri-food industry continues to The agri-food industry continues to have difficulties adjusting to NAFTA in have difficulties adjusting to NAFTA in those sectors where:those sectors where:

government has guaranteed something government has guaranteed something to one or more industry stakeholders;to one or more industry stakeholders; or or government continues to regulate a government continues to regulate a sector.sector.


Trade Flows - HVPPTrade Flows - HVPP

US high value processed product (HVPP) US high value processed product (HVPP) export shares to both Canada and export shares to both Canada and Mexico increased significantly.Mexico increased significantly.

Mexican HVPP export shares to both Mexican HVPP export shares to both Canada and the US increased Canada and the US increased significantly.significantly.

Canadian HVPP export shares to the US Canadian HVPP export shares to the US remained constant; to Mexico declined.remained constant; to Mexico declined.


Bulk CommoditiesBulk Commodities

GrainsGrains

OilseedsOilseeds

Cotton & JuteCotton & Jute

Coffee BeansCoffee Beans


High-Value Processed ProductsHigh-Value Processed Products

Red meat and poultry meat.Red meat and poultry meat.

Dairy products, milk and eggs.Dairy products, milk and eggs.

Processed fruit and vegetables.Processed fruit and vegetables.

Sugar products.Sugar products.

Imitation dairy products.Imitation dairy products.


High-Value Processed ProductsHigh-Value Processed Products

Packaged and branded food Packaged and branded food products.products.

Juices.Juices.

Water.Water.

Beer.Beer.

Wine.Wine.


Processed IntermediatesProcessed Intermediates

Live animals and birds.Live animals and birds.

Flour and starch.Flour and starch.

Feeds of all types.Feeds of all types.

Oils and fats.Oils and fats.

Hides and fur.Hides and fur.


Processed IntermediatesProcessed Intermediates

Soya products - vegetarian products.Soya products - vegetarian products.

Ginseng root - functional foods.Ginseng root - functional foods.

Enzymes - biotechnologies.Enzymes - biotechnologies.

Extracts/oils - nutraceuticals.Extracts/oils - nutraceuticals.

Wool and hair.Wool and hair.


Produce and HorticultureProduce and Horticulture

Fruits Fruits

Vegetables and potatoes.Vegetables and potatoes.

Flowers and plants.Flowers and plants.

Nuts and spices.Nuts and spices.

Mushrooms.Mushrooms.


Related AgricultureRelated Agriculture

Fish and shellfish.Fish and shellfish.

Lumber and wood products.Lumber and wood products.

Spirits.Spirits.

Cigarettes and cigars.Cigarettes and cigars.

Wool and cotton yarns.Wool and cotton yarns.


Food Industry AdjustmentsFood Industry Adjustments

Consumer FocusConsumer Focus

Value or Supply Chain Value or Supply Chain RelationshipsRelationships

Marketing Strategies Marketing Strategies

Globally Competitive OperationsGlobally Competitive Operations


Consumer-Driven MarketplaceConsumer-Driven Marketplace

PricePrice

QualityQuality

Variety Variety

Safety and HealthSafety and Health

NutritionNutrition


Price: Food Expenditure SharesPrice: Food Expenditure Shares

Canada - 9.8%Canada - 9.8%

USA - 10.9%USA - 10.9%

Mexico - 33.2%Mexico - 33.2%

Japan - 17.8%Japan - 17.8%

Australia - 14.6%Australia - 14.6%


Variety and AvailabilityVariety and Availability

Consumer wants apples, bananas, mango, Consumer wants apples, bananas, mango, corn-on-the-cob, available every day.corn-on-the-cob, available every day.

Consumer wants access to any product Consumer wants access to any product discovered in travel or from a home country.discovered in travel or from a home country.

Consumers want products as inputs to Consumers want products as inputs to recipes available on demand - shellfish; recipes available on demand - shellfish; lemon grass. lemon grass.


Food SafetyFood Safety

Most agri-food products historically grown, Most agri-food products historically grown, raised, processed/manufactured and consumed raised, processed/manufactured and consumed locally. locally.

Processors, retailers, restaurants, and food Processors, retailers, restaurants, and food service largely purchased local.service largely purchased local.

Consumers did not question the food chain re: Consumers did not question the food chain re: safetysafety

Food safety issues/problems were “localized” or, Food safety issues/problems were “localized” or, in the case of imports, isolated at the border.in the case of imports, isolated at the border.

No longer true today.No longer true today.


Food Value ChainFood Value Chain

ConsumerConsumer

Retailer or Food ServiceRetailer or Food Service

Wholesale/DistributionWholesale/Distribution

ProcessorProcessor

ProducerProducer


Marketing StrategiesMarketing Strategies

Adding value to commodities.Adding value to commodities.

New food products (e.g., nutraceuticals)New food products (e.g., nutraceuticals)

Certified Products:Certified Products:

OrganicsOrganics

Angus BeefAngus Beef

Specialty EggsSpecialty Eggs


Marketing StrategiesMarketing Strategies

Quality Assurance - VQA for wine.Quality Assurance - VQA for wine.

Farm Processing/Direct Farm SalesFarm Processing/Direct Farm Sales

Complementary Marketing of Products Complementary Marketing of Products

Regional Marketing Regional Marketing

Local identification programsLocal identification programs

Psychographic profilingPsychographic profiling


Globally Competitive OperationsGlobally Competitive Operations

Source product/inputs globally.Source product/inputs globally.

Provide quantity and quality based upon Provide quantity and quality based upon a national or continental market.a national or continental market.

Invest in other North American markets.Invest in other North American markets.

Protect domestic market through Protect domestic market through marketing strategies, not protectionism.marketing strategies, not protectionism.

Documents

NAFTA Trade Flows General Agriculture and the Food Industry