Brazil, Mexico look to strengthen trade ties as NAFTA talks loom

A Mexican delegation of government and private sector representatives is in talks with Brazilian counterparts to close new supply deals of corn, soy and rice and reduce dependence on U.S. trade, members of the delegation said on Thursday.

In the second day of a three-day mission to Brazil, Raúl Urteaga, general coordinator of international affairs at Mexico's Ministry of Agriculture, said the main purpose of the visit is to accelerate business contacts between the two countries as part of broader efforts to diversify Mexico's trade ties with nations other that the United States.

The delegation also visited Argentina.

"The main reason for the mission this week is to look for Brazilian suppliers of grains," Urteaga said.

Mexico wants to substitute mainly U.S. corn suppliers.

A longer-term objective is to deepen an economic cooperation agreement between Brazil and Mexico. "Both sides are seeking better access to each other markets," Urteaga said without elaborating on any deals closed.

The Mexican visit coincides with looming talks to change the North American Free Trade Agreement and underscores Mexico's concerns about a possible overhaul of the pact with Canada and the United States.

Mexico's agricultural exports, ranging from beer to meat and tequila, total about $30 billion a year, with the U.S. buying 78 percent of the country's agricultural products, Urteaga said.

"The rhetoric coming out of Washington is only focusing on merchandise trade, and what matters here is the total account," he said referring to American companies operating in Mexico, which benefit from the trade of goods and services and can repatriate profits as a result of such exchanges.

Mexico's poultry industry uses about 10 million tonnes of corn and 3 million tonnes of soybean meal as animal feed each year, said César Macías, head of the National Union of Poultry Farmers, who is also in the delegation.

Mexico does not produce the yellow corn needed to feed animals, and the U.S. standing as the country's priority supplier may be coming to an end.

Feed represents 70 percent of chicken and egg production costs, he said.

"Trade with the U.S. is very efficient because of the infrastructure in place but we believe Brazil can also be competitive, especially if it can efficiently ship production out of its northern ports," Macías said.

Source: Reuters