Estimating the unintended impact of the North American free trade agreement on U.S. public health

Abstract

The North American Free Trade Agreement (NAFTA) was introduced in 1994 between Canada, Mexico, and the United States to encourage trilateral trade. In 2008, an unrestricted reciprocal sugar trade agreement, was implemented between Mexico and the United States as part of NAFTA, which led to a significant decrease in the United States' sugar price. However, critics argue that free trade agreements that reduce trade barriers on products such as sugar threaten public health. This study uses the synthetic control method to investigate the causal impact of the unrestricted sugar trade agreement on sugar consumption and diabetes prevalence in the United States. First, we show that sugar consumption in the United States increased by an average of 16% annually after the agreement was signed, corresponding to 5240g per capita. Second, we show that the crude prevalence of diabetes increased by an average of 1% annually in the United States after the agreement was signed, with an increase of 1% and 2% for men and women, respectively. This unintended consequence of NAFTA has had an estimated economic cost of $324.37 million annually.

Keywords: Diabetes; NAFTA; Sugar trade agreement; Synthetic control.