Mexico is in the midst of commercial trade negotiations with other countries: While reviewing the North American Free Trade Agreement (NAFTA) with the U.S. and Canada, Mexico also entered into renegotiations with Brazil for the bilateral Economic Complementation Agreement (ACE). Food security is one of the focuses, which obviously includes agricultural products.
Mexican chicken import market
According to data from U.S. Department of Agriculture’s Foreign Agricultural Service (FAS), Mexico accounts for about 20 percent of U.S. chicken exports (18.7 percent, year-to-date in 2017). Hong Kong follows with 9.7 percent and Cuba with 6 percent.
On the other hand, according to data from the Brazilian Association of Animal Protein (ABPA), the Mexican market accounted for only 2.26 percent of Brazil's exports in 2016, although everything seems to indicate that by 2017 the amount of chicken will increase.
It is worth mentioning that, in general, the U.S. participates little in the traditional Brazilian export markets, such as Saudi Arabia, and conversely, Brazil participates little in traditional U.S. chicken export markets, such as Mexico.
Perhaps one of the interesting differences to note between the two countries is that 94.5 percent of U.S. exports are in various chicken cuts and only 2 percent in whole birds, while Brazil exports 59.2 percent in cuts and a 36.6 percent in whole birds, according to data from The Global Trade Atlas.
Poultry: high priority for Brazil
Last week, during the International Poultry and Swine Show (SIAVS) in São Paulo, Brazil's Minister of Agriculture, Blairo Maggi, was very clear about poultry: “We are very interested in opening the Mexican market. After the Trump event, I have met twice with the Secretary of Agriculture of Mexico. Agriculture needs to be considered in the negotiations with Mexico, because it is the best business for our country."
On the other hand, Odilson Riveiro, secretary of international relations of the same Ministry of Agriculture added that "with Mexico we are currently in the renegotiation of ACE 53 (Economic Complementation Agreement) that includes a list of priority agricultural products of Brazil for export to Mexico". In these renegotiations, Brazil's expectations regarding poultry farming have not yet been reached.
However, "poultry meat has a high priority in the renegotiation of ACE 53", emphasized Riveiro.
USA without plan B
Jim Sumner, president of the USA Poultry & Egg Export Council (USAPEEC) and the International Poultry Council (IPC), spoke during his presentation at SIAVS about his concern about President Donald Trump and his impact, although he believes that the relationship with Mexico will not change with regards to NAFTA. In fact, he said that the agreement is one of his priorities. “Our two Secretaries of Agriculture have a good relationship. I think our Mexican friends have realized that we will not enter into a commercial war."
However, when asked if the United States has a plan B if NAFTA was terminated, he said: “I hope plan A continues to work. It has been a great market for us,” which is somewhat of an indication that there is no other plan. “It is a temporary issue, much of this by the lack of precision of media, something caused by the same President Donald Trump, who first he says something that attracts the attention of all and then retracts,” he said.
Brazil and USA on the field
Sumner is aware that Mexico is completely free to buy chicken wherever, but like him, many bet on the geographical proximity of both countries. “It is difficult for Mexico to reach a better economic agreement with other countries than with the United States."
However, as far as poultry products are concerned, there are certain products that Brazil exports more effectively than the USA does. For example, Sumner mentions that the U.S. does not export chicken wings, "because we cannot produce enough for our own needs; we even bring them from Chile." The U.S. also does not export whole birds and very little breast, "so there may be certain niches in which Brazil, Chile or Argentina can best serve."
The president of USAPEEC believes that "the U.S. will continue to be Mexico's main supplier of chicken meat and mechanically-deboned meat (MDM). I do not think it will change at all."
On the other hand, Francisco Turra, president of ABPA, commented in the SIAVS that the "[U.S.] threats to exit NAFTA have brought us closer to Mexico, which was previously impossible. In reaction to the fright, we started exporting chicken."
With other countries, such as Russia, Brazil has made markets "in the most humble and faithful way." He also said that "regarding the agreement with Mexico, we are in a very rich moment of possibilities to create it."
Things change and situations do too.
“Brazil has changed. It is much more open, very interested in making new trade agreements, as with the EU, Canada and Mexico. There is a great appetite to negotiate, and it is not only Brazil, it is the rest of Mercosur, said Ambassador Roberto Jaguaribe, president of APEX, Brazil’s Export Promotion Agency.
