September 24, 2020

Mexico is the largest buyer of US corn, but a renegotiation of NAFTA could prompt them to look elsewhere


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By Caroline Kamm, Christian Science Monitor From Business Insider

In response to widespread concern over the renegotiation of the North American Free Trade Agreement (NAFTA) under the Trump administration, the Mexican agricultural sector is promoting an unfamiliar message: reduce ties to US agriculture and look for new trading partners.|

Citing indications of a possible 20 percent import tax, Mexican Senator Armando Rios Piter has introduced a bill to replace corn imports from the US with those from Brazil and Argentina.

“It’s time to think about how to shift the place where we are putting our money,” said Rios Piter. “If we stop buying their corn, farmers would have a good idea how important Mexico is.”

It’s not only corn that could be affected by the renegotiation. The Consejo Coordinador Empresarial, one of Mexico’s largest business groups, has also announced that they will look for new sources of imported soy, corn, and wheat.

Again citing fears about the renegotiation of NAFTA, particularly how it could impact Mexican import prices, the organization is taking a proactive approach. As Juan Pablo Castanon, the group’s President said, “We’d like to keep the trade deal as it is, but right now we have to look for alternative producers and Brazil and Argentina could work.”

Mexico is by far the largest buyer of U.S. corn, accounting for over 25 percent of annual US corn exports, totaling US$2.5 billion in the 2015–2016 year. Losing a major buyer could push down corn prices nationwide, particularly affecting farm incomes in areas like the Midwest, which have mainly specialized in corn production.

The proposal to establish an import tariff is intended to balance US imports and exports, as well as help pay for additional government spending. However, critics say that a sector like agriculture, which already enjoys a trade surplus, could be adversely impacted.

The agricultural system is quite rigid, and in the US, it is structured to export staple crops while importing many of its fresh fruits and vegetables. In other words, while US farmers look anxiously to changes in their export market, the US food system as a whole could experience pressure and rising prices from imports.

Senator Rios Piter and others representing Mexican stakeholders argue that this tariff does not recognize the co-dependence between Mexican and US agriculture.

His proposed bill is in the early stage, however, Rios Piter’s initial intention of shifting the conversation surrounding the Mexico-US trade relationship has sparked debate among American farmers, decisionmakers, and advocates.

The post Mexico Looks Beyond U.S. for Corn Imports appeared first on Food Tank.

Read the original article on Christian Science Monitor. Copyright 2017.


Jim Young/Reuters

In this Tuesday, Aug. 10, 2010 photo Giorgio Fidenato stands on 350 square meters (almost an acre) of nearly mature corn genetically altered to resist pesticides that just a day before had been trampled by 70 anti-GMO activists, near Pordenone, northern Italy. Giorgio Fidenato’s corn is genetically modified, grown in fields of surreptitiously, and, detractors say, illegally planted Monsanto seed in northeastern Italy not far from the Austrian and Slovene borders. More activist than farmer, Fidenato’s cultivation of nearly 5 hectares (12 acres) of GMO corn is a rogue act aimed at forcing the authorization of genetically engineered crops in Italy. The Italian battle is shaping up at a critical moment for the future of genetically modified crops in Europe, where the population has generally viewed the technology with suspicion. Paolo Giovannini/AP

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