USDA flags Mexico importance to US corn exports, as Nafta talks loom

12.06.2017

US farm officials underlined the importance of free trade agreements  - especially with Mexico – to corn exports, following on from an industry caution, even as Washington prepares to start renegotiating the Nafta deal.

US corn exports to the 20 countries with which the country has agreed free trade deals (FTAs) "have trended up over the years, hence benefiting from preferential agreements", the US Department of Agriculture said.

Indeed, since 2013-14, they have exceeded, and accelerated ahead of, shipments to countries with which the US does not have a trade pact, to the tune of some 50% in 2015-16, the latest season for which data were given.

After a period when shipments were limited by demand from domestic ethanol plants, and the squeeze after the drought year of 2012, "competitive prices have both restored and expanded trade to free trade agreement partners", the USDA said.

'Top market'

And in shipments to countries with which the US has trade agreements, "exports to Colombia and Mexico stand out", the USDA said.

"Mexico has become the top market for US yellow corn, which is used for feed, while the country's production, primarily white corn, is used for food," with shipments of 13.3m tonnes, worth $2.5bn,  last season.

The comments come as the administration of President Donald Trump - who has raised tensions with Mexico by proposing to a wall along the US border, which he says Mexico will pay for – prepares to begin talks on renegotiating the Nafta trade deal between the two countries and Canada.

'Very strong statement'

And they followed a mission by all directors of the US Grains Council, an industry group which promotes US grain exports, to Mexico City "to discuss the trade relationship between US producers and Mexican end-users".

"We felt it was really important for the board, and the board felt it was important, to meet with their customers face-to-face and hear what they have to say," said Tom Sleight, the council's chief executive.

"That physical presence means a lot to our Mexican trading partners," making a "very strong statement".

The council added that its "top priority" as the governments of the United States, Mexico and Canada renegotiate Nafta, in meetings which could begin in August, "is to maintain this market access and keep this demand in place".

Biotech barriers

The USDA flagged the role of the rise of genetically modified technology in undermining exports of corn to countries with which the US does not have a free trade agreement, and some of which have curbs on imports of biotech crops.

"Exports to non-FTA partners have trended downward partly due to biotech policies in importing countries," the department said noting that, "before biotech issues arose in the mid-1990s, the European Union was a top destination for US corn.

"Likewise, China became a growing market in the early-2010s but banned shipments because of these issues," and some African countries "have a preference for non-biotech corn".


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