USMCA ratification will solidify U.S. pork access in critical markets

Mexico is the second-largest market for U.S. pork variety meat, trailing only China/Hong Kong.


Source: U.S. Meat Export Federation (USMEF)

via National Hog Farmer - Jan 08, 2020


In December, with strong bipartisan support, the U.S. House of Representatives approved legislation ratifying the U.S.-Mexico-Canada Agreement on a vote of 385-41. While the U.S. Senate and Canadian Parliament must also approve USMCA before it enters into force, clearing the U.S. House was a major step toward ratification. The U.S. Senate Finance Committee approved the trade agreement on Jan. 7, setting the stage for the full Senate to vote.


"House members' emphatic support for USMCA was very encouraging, not only for the U.S. meat industry but also for our customers in Mexico and Canada," notes Dan Halstrom, president and CEO of the U.S. Meat Export Federation. "Through what has been a long and often frustrating process, we appreciate the bipartisan effort by House leaders and the Trump administration to keep USMCA on track for implementation."


Since Mexico removed its 20% retaliatory duty on imports of U.S. pork in May 2019, U.S. pork exports have again enjoyed duty-free access to both Mexico and Canada under the North American Free Trade Agreement. But the U.S. industry is still feeling the impact of Mexico's duties, which were first imposed in June 2018 in response to U.S. tariffs on steel and aluminum.


"Pork exports to Mexico rebounded after the duties were removed, but certainly not to the record-breaking levels we saw in 2017 and early 2018," Halstrom says. "To fully rebuild and expand demand for U.S. pork in Mexico and reestablish our reputation as a reliable supplier, long-term trade relations with Mexico must be on a positive trajectory. Ratification of USMCA will go a long way toward achieving that."


Mexico is the largest volume destination for U.S. pork exports and second to Japan in export value. Exports to Mexico peaked in 2017 at just over 800,000 metric tons valued at more than $1.5 billion. When full-year data is available for 2019, export volume will likely reach about 705,000 mt, valued at about $1.2 billion.


"U.S. pork exports to Mexico set a new volume record for the sixth consecutive year in 2017 and were actually ahead of that pace in early 2018, prior to the impasse over steel and aluminum tariffs," Halstrom says. "For the U.S. industry, getting exports back to that level is a top priority."


Canada is also a top five destination for U.S. pork, with exports in 2019 projected to reach about 215,000 mt valued at nearly $800 million. But Halstrom notes that in addition to being high-volume markets, the product mix exported to Mexico and Canada is an excellent complement to leading Asian markets such as Japan and South Korea.


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