The North American Free Trade Agreement (NAFTA) was a trade pact written back in the early 1990s. Derrell Peel, an extension livestock specialist with Oklahoma State University, is one person who aided and gave his insights when trade negotiators were writing the deal.
Peel worked in Mexico for a number of years and still continues to do so today. He gives his insights on how trade has evolved over the last 30 years.
“NAFTA from its beginnings was a big new step for the U.S. generally and certainly for the beef markets. We’ve seen a lot of growth in those markets over time,” said Peel.
Peel says how the U.S. has imported cattle from Mexico for a long time. He says with NAFTA, the U.S. began to export a lot to Mexico and in more recent years, the U.S. has imported beef and cattle from Mexico.
“We’ve seen a lot of evolution from that market overtime,” said Peel.
He says USMCA (the trade agreement between the U.S., Mexico and Canada) reaffirms those basic principles but didn’t “change things a great deal as far as beef markets.” He believes it’s a continuation of the philosophy of the first deal.
Peel says he sees China becoming a larger market just like Mexico. He says the beef market to Mexico was quite small to begin with as well.
“I do think there’s a parallel in general in terms of the way trade with China may evolve with U.S. beef,” said Peel. “It’s a very different market, it’s a new market. Once we get past political barriers, then the real work in the marketplace begins to sort of earn market share.”
He says U.S. beef product is different than what China imports from other countries.
“We need to figure out what products work, which price levels are competitive in that market. It’s going to be an ongoing process to develop that market,” said Peel.
He says China has grown so rapidly and is by far the biggest importing country in the world.
“If we can capture even a relatively small percentage of that total market, it will be a big boost to total beef exports,” says Peel.
Peel believes it will take three to five years before the U.S. will see some big boosts with U.S. beef exports to China.