Potential Entry of Chile into NAFTA: Are There Lessons from U.S./Mexican Fruit and Vegetable Trade?

Abstract Although the Clinton administration has been unable to obtain fast‐track negotiating authority, eventual expansion of free trade in the hemisphere is likely, and the U.S. position might be affected by the failure to negotiate Chile's entry into NAFTA. One hurdle to broad‐based support for Chile's entry is U.S. horticulture producers' claims of “injury” from NAFTA trade. We argue that (a) considerable empirical evidence acquits NAFTA of these charges, (b) liberalizing Chile's strict trade barriers should yield significant U.S. gains, and (c) NAFTA's combined trade‐investment reform facilitates U.S. foreign agricultural investment. Together these benefits imply that resistance to Chile's entry is unwarranted.