Trump's trade tactics will hurt American agriculture

THE election of Donald Trump as US president has changed the relations that have existed in recent decades between the United States and Mexico.

Among many of his outrageous claims are that the Mexican government is "forcing their most unwanted people" who are "criminals, drug dealers, rapists, etc, into the United States". He wants to build a "big beautiful wall" on the shared border, paid for by the Mexicans, to stop illegal migration. He plans to renegotiate North American Free Trade Agreement (Nafta) which contributed a US trade deficit with Mexico in goods of US$63.2 billion last year. He has also suggested a border adjustment tax which will make Mexican imports more expensive.

Overall, Nafta has been beneficial to Mexico, Canada and the US. Since Nafta was signed in 1994, foreign direct investments (FDI) in Mexico have averaged 2.6 per cent of gross domestic product compared to one per cent two decades before Nafta. Today, annual bilateral trade between the two countries is running at US$580 billion.