By Jamie Barrie A professor at university once told me that economic winners are always proactive not reactive to economic changes. So with U.S. President, Donald Trump promising to make America Great Again, one of Mexico’s largest business groups is being proactive about possible changes to the NAFTA and working on a plan of action ahead of talks to renegotiate the North American Free Trade Agreement and finding alternatives to the U.S. for grain imports. The Consejo Coordinador Empresarial (CCE), one of Mexico’s top business chambers which was established in 1976 and represents the country’s main agricultural, industrial and financial industry organizations, among others is said to be examining other opportunities with countries such as Brazil and Argentina for new sources for soy, corn and wheat, according to Juan Pablo Castanon, the group’s president. Exports from those countries could help Mexico adjust to any changes that might come about with the renegotiation of the NAFTA. Castanon also said, “The renegotiation might bring increased costs to imports, and our own exports might be hurt, so we need to find new markets,” he went on to say that the group’s efforts are still in the initial stages. A move like this by Mexico’s top business chamber to seek out new sources to import raw materials from other coun- tries could hit U.S. farmers hard and they know it. Mexico
is the largest buyer of U.S. produced corn, spending $2.5 billion USD in 2015-2016, well ahead of Japan with $1.8 billion USD, according to the U.S. Grains Council numbers. As Mexico prepares to hold talks with Canada and U.S. as President, Donald Trump moves forward with his plan to withdraw fromNAFTA if Canada and Mexico are not willing to renegotiate. Castanon said, “We’d like to keep the trade deal as it is, but right now we have to look for alternative producers and Brazil and Argentina could work.” The push is not limited to grains, Castanon said. Other imports such as meat are also being considered. “An economy as important as Mexico’s needs to have secure supply sources on many fronts,” he said. Sigma Alimentos SA, the meat-packaging unit of Mexican conglomerate Alfa SAB, is looking into countries such as Brazil and Chile as new sources of raw materials, Chief Financial Officer, Eugenio Caballero reportedly said on a call with investors last week. Castanon said, switching suppliers isn’t as easy as flipping a switch. Mexico depends heavily on rail for imports from the U.S. and Canada, which wouldn’t work for goods from South America. But, Mexico’s ports could handle imports from the south, and the benefits would outweigh the costs. “We need to open new doors,” he said. “As the trade talks progress, we’ll see how we need to make use of them.”
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SPOTLIGHT ON BUSINESS MAGAZINE • MARCH 2017
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