A Mexican trade action against American beef imports has turned into an opportunity for Canada.
Exports to Mexico have increased substantially since the duty was imposed, said Cam Daniels of the Canada Beef Export Federation.
“We’re getting a lot more inquiries from Mexico,” he said.
In 1998, Canada sold 2,771 tonnes of beef and 1,300 tonnes of offal products to Mexico.
That shifted dramatically in 1999.
During the first half of this year, beef exports are nearly 9,600 tonnes while offals dropped to about 700 tonnes. Mexico traditionally bought large amounts of offals including livers, tongues and cow lips.
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“There has been a decrease in these products in favor of primal cuts,” said Daniels.
Almost all the meat destined for Mexico came from Alberta with a smaller amount from Ontario.
The Mexican action started more than a year ago and was taken in response to an American anti-dumping petition filed by the Ranchers-Cattlemen’s Legal Foundation. R-CALF charged that large imports of Mexican cattle were disrupting markets in the southern United States.
The Mexican duty is similar to the 5.57 percent tariff levied against Canadian live cattle exports. Initiated by R-CALF, the trade action came about when the U.S. charged Canada with exporting live animals below the cost of production.
In early August the Mexican trade ministry issued a preliminary ruling in favor of the Mexican cattle producer association’s beef anti-dumping petition. The preliminary finding concluded that U.S. beef had been dumped into Mexican markets because American packers were exporting beef below the cost of production.
This decision triggered the tariffs, said James Mintert, an agricultural economist with Kansas State University.
The tariff is in place for at least six months while the Mexican government continues to investigate.
The initial complaint was filed against Excel, IBP, ConAgra and Farmland National Beef. Tariffs range from zero to 7.6 percent on boneless and bone-in cuts exported by these four.
Larger tariffs on imports of boneless and bone-in beef from companies other than the big four packers are 75 and 13 percent, respectively.
Tariffs of three to 36 percent were slapped on U.S. beef offal products from the big four packers while other companies must pay 215 percent on offal products.
Before the tariff, the U.S. supplied about 95 percent of Mexico’s imports of beef.
Figures from the American National Cattlemen’s Beef Association said in the first quarter of 1999, Mexico imported 46,000 tonnes of beef, a 15 percent increase over 1998.
The NCBA protested against the duties and credits itself with preventing a levy on live cattle.
“Following work last fall with the Mexican cattlemen’s group, both NCBA and that group agreed not to support duties on live cattle trade between the two countries,” said Dana Hauck, chair of the foreign trade committee.
“Open communications and negotiations have resulted in zero tariffs being levied against live cattle,” he said in a prepared statement.
During a July summit of the Five Nations Beef Conference in Calgary, the members agreed to seek a new definition for dumping other than the cost of production yardstick. The cyclical nature of the cattle business can force producers to sell below their cost of production when supplies are too large.
The five nations are Canada, the U.S., Mexico, Australia and New Zealand.
