Argentina will Export Meat to Mexico after 20 years

Published Apr 19, 2021

The Argentine government reached an agreement with Mexico to reopen the country's market to its exports of beef, which was not able to enter Mexico for two decades. Mexico closed its market to Argentine meat after cases of foot-and-mouth disease were recorded in Argentina in 2001. The recent agreement comes as great news for Argentinian meat exporters as it opens an opportunity for beef cuts in the premium Mexican market. On the other hand, the news has brought concern to Mexican organizations worried about health regulations.

The news came after both countries agreed on promoting technical cooperation in agriculture to strengthen food security in the region and advance in post-harvest handling systems in the production and storage of grains.

A Promising but Cautious Market

Mexican imports of fresh and refrigerated beef totaled USD 670 million in 2020. USD 39 million were frozen beef imports. According to the United States Department of Agriculture, Mexico will import 130 thousand tons of beef this year.

Mexico has become an important market for cut meat, as it ranks fifth in the world consumption of beef, with about 15 kilos per year per inhabitant. It represents a very attractive market for the major exporters in the meat industry.

Even though Mexico has been an important market, the country has also positioned itself as a large producer and importer of beef, mainly in the northern states, where bovine livestock production has expanded considerably over the last few years. In 2019, Mexico exported a high record value of USD 1.2 billion. 97% of those exports went to the US. For this reason, livestock producers in Mexico have some concerns with the opening of a new Argentinian market, as the memory of an entry of aphthous fever (foot- and- mouth disease) in Mexico still remains, where exports were closed in 2001. In this sense, the sanitary section of the agreement will be a key point to advance in the negotiations as Mexico has remained very careful to import meat from countries that have had an aphthous fever in the past.

Health Protocols and Tariff Negotiations

Mexico currently imports meat from other countries in the region, such as Uruguay and Paraguay. Therefore, it is feasible that it can also have protocols in place for the import of Argentine beef. Maria Schargrodsky, Tridge´s Engagement Manager in Argentina, stated that “despite having livestock infections in the past, the country is now free of the aphthous fever with vaccinations. Many years have passed without the fever being present all through the country”. In 2018, the US reopened its market to the Argentine beef import. Since 1980, Argentina has been part of the Hilton Quota, a quota to enter the EU market granted to beef producers worldwide that meet sanitary and quality standards.

Both countries agreed to advance in the opening of the Mexican market to Argentine beef meat products in the same health and safety terms with which it is currently open to Uruguayan origin meat. The National Service for Agrifood Health, Safety, and Quality (SENASICA) will liaise with its Argentine counterpart, the National Service for Agrifood Health and Quality (SENASA), to open Mexican imports of beef under the terms agreed. They have announced that a SENASICA representative in Uruguay will travel to Buenos Aires and agree with the Argentine SENASA authorities on the steps to follow to develop the protocols and enable the refrigeration establishments.

The Market for Argentinian Beef will be Determined by Tariffs

Tariffs will govern the entry of Argentine beef in Mexico. Argentina is a traditional world exporter of meat, shipping approximately 900 thousand tons in 2020. Of those, 51% was exported to China. However, Argentina will face tariff competition when entering Mexico. It is unlikely that the imported Argentinian meat could be granted a low tariff scheme due to Mexico's present agreements with other countries. Along with the US and Canada, Mexico is part of NAFTA, a free trade agreement through which these countries buy and sell must meat with zero tariffs.

Uruguay has been exporting beef to that destination for 15 years, but the sum of high tariffs and maritime freight makes it a low-volume business. It is estimated that the tariff granted to Argentinian meat will reference the currently open model to receive meat of Uruguayan origin, which will apply to all sanitary protocols.

Thus, the promotion of the Argentinian beef in Mexico would need to be a quality business above volume campaign, targeting specific high-added niche markets such as restaurants, premium import markets, and the specialty gastronomic gourmet sector.

Sources: