Three Amigos talks: Canada pushing Mexico to fully reopen beef market
Canada is pushing Mexico to fully reopen its market to Canadian beef, and hopes to announce a breakthrough at this week’s North American leaders summit.
If it succeeds, it will be an economic — and politically symbolic — victory.
Mexico was among the dozens of countries that banned all imports of Canadian cattle and beef after the 2003 outbreak of bovine spongiform encephalopathy (BSE).
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Over time, remedial measures and significant lobbying on Canada’s part reopened most of those markets. In the years since, additional BSE cases brought new bans in some countries, but most have been lifted.
In Mexico’s case, it’s never agreed to allow Canadian imports of cattle or beef from cattle over 30 months of age back across its border.
The lion’s share of Canada’s beef trade is done with the United States.
But even with its restrictions, Mexico’s geographic proximity and growing middle-class consumer appetites for beef make it Canada’s third most important market.
‘Expecting the support of Mexico’
The signs of a potential tit-for-tat arrangement between the two countries have been building.
Mexico is eager to see the Liberals fulfil their election promise and lift Canada’s visa requirements for Mexican travellers, despite warnings about potential security risks.
Mexican President Enrique Peña Nieto is in Canada this week for a state visit and meetings with Prime Minister Justin Trudeau before the pair attend the so-called Three Amigos Summit with U.S. President Barack Obama on Wednesday.
International Trade Minister Chrystia Freeland confirmed the visa issue is in play at an event with the Canadian Council for the Americas in Toronto on June 18. And she linked it with what Canada’s looking for in return.
“There are other problems on which we are working closely and we are expecting the support of Mexico on those issues, such as the matter of trade in beef,” Freeland said.
In recent days, there’s been a new willingness to engage and discuss the issue.
The Mexican agriculture secretary, José Calzada Rovirosa, had a phone conversation with Agriculture Minister Lawrence MacAulay last Monday. Calzada Rovirosa might be part of Mexico’s delegation in Ottawa this week.
“The issue of reopening the border to beef from cattle over 30 months of age has been at the forefront of discussions with Mexico for a number of years, and is always on the agenda, among other topics, when the minister speaks to his counterpart from Mexico,” MacAulay’s director of communications said in a statement to CBC News.
Symbolic and economic value
The Canadian Cattlemen’s Association estimates Mexico’s border closure was costing the sector up to $40 million annually at the height of the beef sector’s downturn seven or eight years ago.
Today, the market conditions have improved for Canadian beef, but the CCA still anticipates a full reopening could be worth an additional $5 million a year.
Because Canada is trading more with China and other Asian countries, Mexican authorities may find it easier to agree to lift the restrictions in these happier times, figuring Canada is unlikely to suddenly dump cheap product on the Mexican market.
But as this recovery continues, access to markets beyond the U.S. remains key for Canadian beef producers, particularly with the new market access secured in recent trade deals somewhat uncertain.
The Canada-EU trade deal offers significant new market access for Canadian beef, but Thursday’s Brexit vote may delay or derail its ratification. The Trans-Pacific Partnership deal among Pacific Rim countries offers significant access to key Asian markets like Japan, but its ratification in the U.S. is in doubt.
The list of countries that restrict Canadian beef imports can now be counted off on one hand, with Mexico by far the most economically significant. If it drops its ban, other holdouts may follow suit.
“Mexico has been one of our priorities… because symbolically, when you’ve got an important market holding what we would say… [is] an unjustified trade restriction on us, it doesn’t bode well around the world for trade decisions being made on scientific merit, on international standards,” said John Masswohl from the Canadian Cattlemen’s Association. “It’s something you want to get cleared away.”
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