A trade battle between Mexico and the United States has helped Canadian beef exporters make big inroads into the Mexican market.
The Canada Beef Export Federation expects beef exports to Mexico will reach 38,000-40,000 tonnes in 2000, up a whopping 45 percent from last year’s 27,400 tonnes. In 1995 Canadian beef exports to Mexico were less than 6,000 tonnes.
Ted Haney, federation executive director, said the upturn in business was brought about by hard work and happy coincidence.
Since Mexico joined the North American Free Trade Agreement, the federation and its meat packing members had been building a profile in Mexico, getting importers familiar with Canadian beef.
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The Mexicans made some test purchases.
Then in 1999, Mexico imposed anti-dumping duties on some types of American beef.
“But they were structured in such a way they had virtually no effect.”
The tariffs applied to only certain cuts from certain American suppliers and the whole Mexican retail trade was exempt from the duties.
“The tariffs were designed to send a message rather than to truly disrupt trade.”
However, the situation invited Mexican importers to investigate alternatives to U.S. beef.
“We were the alternative,” said Haney.
Major and medium size packers in Canada committed to Mexico, and importers there committed to Canada. Longer-term supply contracts were signed.
The new confidence generated even more business.
The industry considers trade data that will be available from the Canadian Food Inspection Agency later this year to be the most accurate information on exports. But it notes data from Statistics Canada shows exports to Mexico in the first six months of this year running at twice the pace of the same period in 1999. Anecdotal evidence from federation members appears to back this up, Haney said.
This has given the federation the confidence to increase its forecast of Canadian beef exports to Mexico to 38,000-40,000 tonnes in 2000, up from 31,000.
On a volume basis, that will put Mexico solidly in third place on Canada’s beef export list, behind the U.S. and Japan. On a dollar basis third place will be a toss up between Mexico and South Korea, which is expected to import fewer tonnes but of higher value cuts.
