Since the inception of the North American Free Trade Agreement (NAFTA) in
1994, tariff restriction to U.S. poultry products entering the Mexican market has
decreased significantly. While poultry trade from the U.S. to Mexico has increased
considerably, Mexican chicken exports to the U.S. face a sanitary restriction. This
concerns chicken producers in Mexico. Consequently, the Mexican government
negotiated with the U.S. government an extension, from 2003 to 2008, of the tariff rate
quota (TRQ) on U.S. chicken leg quarters entering the Mexican market.
The purpose of this study was to estimate the economic impact of trade policies
restricting the chicken trade between Mexico and the U.S. Two trade policy scenarios
were analyzed: (1) a removal of the Mexican tariff rate quota (TRQ) on U.S. chicken leg
quarters, and (2) a removal of the TRQ and, in addition, a removal of the U.S. sanitary
restrictions to Mexican chicken. A cost minimization mathematical programming model
was used to estimate the optimum levels of production, consumption and trade, subject
to policy restrictions.
The study found that if the Mexican TRQ on U.S. chicken leg quarters is
eliminated, chicken production in Mexico would shrink by 51% compared to the actual level of production as of 2003. A less drastic effect on Mexican production of chicken
was found when, in addition to the TRQ removal, the U.S. sanitary restriction on
Mexican chicken is eliminated. In this second scenario total production in Mexico would
decrease by 24%. Under both scenarios chicken production in the U.S. is estimated to
have an increase, 8% and 4% for the first and second scenarios, respectively. These new
levels of production would affect trade levels and prices for chicken and chicken parts in
both countries.
| Identifer | oai:union.ndltd.org:tamu.edu/oai:repository.tamu.edu:1969.1/2509 |
| Date | 01 November 2005 |
| Creators | Magana Lemus, David |
| Contributors | Salin, Victoria |
| Publisher | Texas A&M University |
| Source Sets | Texas A and M University |
| Language | en_US |
| Detected Language | English |
| Type | Book, Thesis, Electronic Thesis, text |
| Format | 1363806 bytes, electronic, application/pdf, born digital |
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