The United States, Canada and Mexico long ago agreed to renegotiate the North American Free Trade Agreement (NAFTA). American and Mexican officials are expected to reach a bilateral agreement this week.
A meat industry proponent talks about the importance of reaching an agreement with Mexico, as well as some of the work his organization has been doing in the meantime.
AUDIO: Money Matters 8-22-18
U.S. Meat Export Federation (USMEF) staff recently traveled to Mexico, in an effort to enhance the United State’s relationship with red meat importers, processors and retailers. USMEF president and CEO Dan Halstrom says the objective was really twofold.
“With (Mexico) being our largest volume market on pork and one of our top markets on beef, we wanted to reiterate to the trade our commitment to the market. We have some duties at the moment, (but) it is still our most important volume market and one we’re committed to long-term,” Halstrom said. “We also wanted to highlight the fact that it’s our feeling that the current trade environment, with the duties, is short-term. What we heard from the trade wholeheartedly was that they’re hearing the same things we are, that NAFTA is indeed making some progress.”
Mexican officials placed a 20-percent duty on United States pork products. Halstrom says “with 80-percent of the import market share being U.S. pork,” United States exporters need to take their competition seriously.
“Anytime you have a tariff, there’s an immediate correlation to value impact,” Halstrom said. “I think we will see a volume impact, but I think volume is still hanging in there well. That being said, we do know that Mexico, through this duty-free allocation, targeted non-U.S. supplies of pork. There’s quite a few examples of buyers starting to test the waters a bit, especially on bellies out of Europe. We also know there’s been some buying of frozen hams.”
Halstrom states the amount of frozen pork purchased from other countries is minimal. However, he worries about the long-term impacts of “inviting some competitors to the party.”