Expenditures and Activities of
Until 1986, the Mexican market was virtually closed to imports of most food and agricultural products. Since the market has opened, as a result of Mexico’s accession to the General Agreement on Tariffs and Trade (GATT), now the World Trade Organization (WTO), the imports of food and agricultural products have increased sharply. The major competition for the United States comes from Canada, the European Union, Chile, Spain, New Zealand, and Australia.
The United States supplied almost all of Mexico’s corn and sorghum imports during 1997 and 1998. Argentina supplied small quantities of corn. Since the signing of the North American Free Trade Agreement (NAFTA), the Canadian Wheat Board (CWB), and the Canadian Malt Industry Association (CMIA), have promoted sales of higher-value malt, rather than pursuing sales opportunities for feed barley and malting barley. Other Canadian organizations active in promoting grains sales to Mexico are the Canadian International Grain Institute (CIGI); the government's Agriculture; and Agri-Food Canada, which offers financial assistance to exporters through its support program.
France's market promotion efforts are shared with several Mexican government bodies which cooperate to carry out the policies of the Agriculture Ministry in areas such as trade exchanges, cooperation and technical support programs.
Australia and New Zealand do the most meat production, focusing on beef and lamb. Canada, Australia, and New Zealand have beef offices in Mexico. The Canada Beef Export Federation (CBEF) is privately funded. CBEF has a trade promotion theme, "Canada Beef, delicious, nutritious, wholesome and unique eating experience." CBEF also has a monthly newsletter in English and a web page, www.chef.com. In 1998, it sponsored two trade missions. CBEF's estimated promotion budget for 1998 was close to $400,000.
Governmental organizations AUSTRADE and TRADE N.Z. promote meat products from Australia and New Zealand, respectively. Both have been somewhat aggressive promoting beef and lamb. New Zealand organizes one food show a year in Mexico.
Uruguay and Argentina do some promotions in Mexico. The estimated budget for marketing activities for the four organizations is less than $100,000. AUSTRADE finances Australian exporters using a government grant.
Central American countries are seeking special access to Mexico for beef through recent free trade agreements. Most countries focus on trade servicing to familiarize importers with their products and production. Trade team visits are a part of this, so are the translated brochures and sale catalogues. Competitor seminars are expected to become more common. FAS expects New Zealand and Australia to promote meat at the supermarket level.
China, Brazil, Canada, and Chile consider Mexico an important forest products market, but have no forest product representational offices in Mexico, or funding for forest product promotional activities. Mexico has signed a trade agreement with Chile which allows Chilean plywood to enter Mexico duty-free. Trade sources suggest that Mexico is planning to negotiate similar trade agreements with other countries, such as Brazil. These agreements will likely cause the United States to lose market share.
Strong competitors for U.S. dairy products are: Canada for cheese and milk powder; New Zealand for milk powder, butter and butter oil, cheese, yogurt; Holland for cheese, yogurt; Ireland for yogurt; and France for casein. Other countries that have encroached on U.S. market share for dairy products are Australia, Belgium, and France by increasing their exports of butter and butter oil to Mexico. European cheeses have been promoted in supermarket chains through sampling. New Zealand advertises in trade magazines, primarily targeting the hotel and restaurant industry. It also conducts seminars and trade servicing activities. Cheese from New Zealand and Holland are price competitive. European private firms conduct in-store promotions.
U.S. fresh fruit exports including apples, tomatoes, strawberries, table grapes, pears, cling peaches, and nectarines, compete in the Mexican market against products imported from New Zealand, Chile and Canada. None of these countries have promotional activities in Mexico. New Zealand and Chile carry out trade missions. While U.S. frozen potatoes hold a 75-percent share of the import market, Canada remains a formidable competitor with strong industry ties.
Palm oil from Malaysia and Central America, rapeseed oil from Canada, and soybean oil from Argentina and Brazil are the main competitors for U.S. vegetable oil in Mexico. The Rapeseed Council of Canada is one of the major oilseed promoters in Mexico. Its main activities are trade show participation, sponsorship of trade events, newspaper columns and brochures, trade missions, reverse trade missions to Canadian farms, fairs and processors, technical assistance to mills and refineries. The most important activity, with a major impact in the market, is the granting of long term credit and attractive low prices.