WILL CAFTA BE A BOON TO FARMERS AND THE FOOD INDUSTRY? NAFTA’s Failed Promises Are Doomed to Be Repeated

that it will provide significant benefits to the U.S. economy, especially to the agricultural sector. Similar prom-ises were made in the debate on the North American Free Trade Agreement in 1992 and 1993. However, since that time NAFTA has failed to live up to these promises, and similar promises made for CAFTA are even less likely to be fulfilled. Some of the key promises made during the NAFTA debate in Congress that have since been broken are summarized in Table 1. It is clear from the table that NAFTA has failed to provide overall trade benefits or to fulfill many of the individual promises made to commodity producers. The exaggerated claims of expected benefits that are now being made for CAFTA are equally as likely to go unmet. NAFTA and CAFTA proponents have made broad promises about the potential for export growth and about the numbers of jobs that will be generated as a result. They imply that exports will grow faster than imports and that there will be trade surpluses for generations to come. While it is true that growing exports are good for the economy, growing imports actually displace domestic production that would support employment in the United States. When agricultural imports rise faster than exports, as was often the case under NAFTA, the result is a net drain on farm output and employment. Given that the United States had already made a free trade agreement with Canada in 1989, NAFTA was really about expanding trade with Mexico. But there has been absolutely no change in the U.S. agricultural or food products trade balances with Mexico since NAFTA took effect. This is remarkable since, as the Office of the United States Trade Representative (USTR) noted: “Mexican tariffs are 2.5 times as high as U.S. tariffs