A couple of weeks ago, I mentioned the importance of strengthening, not undermining, relations with our major trading partners, who are now challenging Mexico’s energy policy.
If Mexico’s violations of T-MEC are confirmed, the United States may respond with tariffs in various sectors of our country, including the agri-food sector. The favorable outlook for this sector could be in jeopardy.
Mexico is the main supplier of food to the United States: from here it imports 22%, including 70% of vegetables and 52% of fruits. It is also the main destination of our agri-food exports with a share of 85.7%.
In 2021 alone, the value was $37,953 million, 1.2 times the total foreign direct investment received by Mexico last year. We are also the second food supplier to Canada with a value of $928 million.
For its part, the US provides 68.3% of Mexican agricultural imports worth $25,451 million, followed by Canada with 7%, equivalent to $2,603 million.
So, in 2021, purchases from T-IEC members accounted for 75.3% of agrifood imports.
One of the biggest successes in T-MEC for Mexico is the fruit and vegetable sector, with products like tomatoes or avocados, and is the most vulnerable to the US. This activity has increased its supply by more than 1150% over the past 27 years and has contributed $17,575 million to the country’s agri-food trade balance, creating more than 1.6 million jobs.
Let’s remember, for example, what happened in 2019. Due to political pressure from Florida growers, President Donald Trump reinstated the tariff provision on Mexican tomatoes at a rate of 17.5%. This decision involved a cost and job loss in Mexico, estimated at $350 million.
Most recently, there was a suspension of avocado imports in February 2022 due to the lack of safety of US inspectors in Mexico, putting a $3 billion industry and 300,000 jobs at risk.
Fortunately, both issues were resolved the way disputes should be resolved: through dialogue between the governments of both countries, accompanied by the private sector.
These are just two successful products that could be affected in the event of retaliatory tariff measures. Others are tequila, beer, sugar, live cattle or beef.
Given the global inflationary environment, any measure that disrupts free trade will affect prices, affecting consumers, producers, jobs, economic benefits and foreign exchange. The Mexican government came in time to have a strategic vision for the state.
cumulonimbus Tariff measures “are a very bad reaction in the environment we know because it’s about economic nationalism. […] and nationalism is war, and everyone loses in war”: Emmanuel Macron.
FROM BOSCO DE LA VEGA
@BOSCODELAV
Source: Heraldo De Mexico
David Ortiz is an opinionated and well-versed author, known for his thought-provoking and persuasive writing on various matters. He currently works as a writer at 24 news breaker, where he shares his insight and perspective on today’s most pressing issues. David’s unique voice and writing style make his articles a must-read for those seeking a different point of view.