Brazilian beef may take a ‘maquiladora’ stop before reaching the US

Brazilian meatpackers may find a new window to enter the United States if the news that Mexico is about to allow beef exports from a new producing unit is accurate.

Depending on the size of future new exports, in addition to the beef that will stay in the domestic market, the possibility of re-exports to the United States should not be overlooked, as the country has quickly become Brazil’s second largest buyer.

See below Brazil’s exports of bovine meat (hs codes 0201 and 0202) to the United States from Jan 2019 to Jan 2023, according to DataLiner data.

Beef exports to the US | Jan 2019 – Jan 2023 | WTMT

Source: DataLiner (click here to request a demo)

Mexico exports more of what they produce to its neighbor in the north than they try to meet internal demand. In other words, if Brazilian shipments have dropped a lot in recent years, and the local government intends to authorize new exporter units, it may well be an attempt to increase re-exports to Americans, a guaranteed source of funds for Mexico.

Much of the Mexican economy is based on ‘maquiladora’ industries, companies that acquire inputs from other parts of the world, especially China, and ship tariff-free finalized products to the US, thanks to NAFTA – the North American trade agreement that also includes Canada.

Even US companies have settled on the Mexican side of the border specifically for this purpose.

This information circulated these days in the Valor Econômico press agency, based on news reports from El Norte. Inf act, another source, the press agency from Monterrey, reproduced a statement by Senasica, the country’s sanitary service, which reported the licensing of Brazilian meatpackers found in 14 different states free from foot-an-mouth disease.

Although maquiladoras are the target of an extensive array of criticism from US workers’ unions and companies that do not share the same commercial advantages as they did not meet the quota components of Mexican origin in the products they export, they have never been barred.

They serve, after all, attenuating US inflation, as the products come cheaper, without tax, and are manufactured by a labor force that costs 1/3 of Americans’ salaries.

According to the consultancy Agrifatto, it is not impossible to imagine a similar triangulation with Brazilian meat, given the characteristics of the local market.

Industries in Mexico increased beef exports almost entirely for the neighbor by 172% in ten years, to 400 thousand tonnes last year. Meanwhile, local production increased by only 21%, despite a 3.18% increase in consumption, but with a decline in per capita consumption, according to the consultancy.

The influential importers pay much more for the “Vacuña” protein than the Mexican domestic market.

It is noteworthy that imports of Brazilian beef by Mexico fell 26.67% in the last ten years. This figure was 165 thousand tonnes in 2022.

Source: Money Times

To read the original report, access: https://www.moneytimes.com.br/habilitacao-de-frigorificos-e-nao-e-que-carne-brasileira-pode-chegar-aos-eua-maquilada-de-mexicana/

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