Mexico is looking at Brazil and Argentina as an alternative for US corn while Mercosur talks with EFTA are advancing

In a response to Trump's trade policy, Mexican Agriculture Secretary said last Thursday he will lead a business delegation to Argentina and Brazil to explore buying yellow corn, part of a drive to lessen Mexico's U.S. dependence.

The trip will happen within the next 20 days, Agriculture Secretary José Calzada said, adding that the government could explore quotas and changing the tariff regime for imports from South America if needed.

On Sunday the Mexican senator Armando Rios Piter, who leads a congressional committee on foreign relations, says he would introduce a bill this week, to shift corn import demand to Brazil and Argentina instead of the United States.

“I'm going to send a bill for the corn that we are buying in the Midwest and...change to Brazil or Argentina,” Rios Piter told CNN.

On Wednesday Marisa Bircher, Argentina's Secretary of Agro-Industrial markets, said that the country hopes to increase exports to Mexico. Argentina exported less than 100,000 tons of corn to Mexico last year.

“Corn is obviously a sector that is on the list to have greater access and gain a bit more space for Argentina, regardless of the presence of the US market,” Ms. Bircher said.

Ms. Bircher said there was also potential for poultry and beef exports to Mexico.

Mexico last year imported 13 million tons of yellow corn, of which 12.75 million tons were provided by US farmers with a bill of US$ 2.3bn.

EFTA/Mercosur talks: confirmed to begin next June

The first round of formal trade negotiations between Mercosur and EFTA, European Free Trade Association, is scheduled to take place in Buenos Aires next June according to information from Brussels where there was a preliminary encounter between the two sides. “It will be in June, and talks will be at chief negotiators level”, confirmed EFTA and Mercosur sources.

The Brussels meeting was headed by Argentine ambassador Guillermo Daniel Raimondi, in representation of Mercosur and Norway's Sveinung Roren for EFTA, which is made up of Iceland, Liechtenstein, Norway and Switzerland, none of them EU members.

“It was also agreed a second meeting in August and the necessary exchange of information, such as nomenclature, stats, trade legislation and policies”, added Mercosur sources. Bilateral trade between the two blocks reached 8.7bn in 2015 when the first contacts were started. Last January in Davos Economic Forum the round of discussions was first agreed.

EFTA exported mostly pharmaceutical products (US$ 1.4bn); organic chemicals (US$ 764m), and machinery (US$ 462m), while Mercosur countries shipped US$ 1.9 bn in precious stones and metals; US$ 859m in inorganic chemical products; US$ 357 in food and US$ 259m in coffee, tea and species.

“We are optimistic about this coming round, which is part of the opening of Mercosur to the world”, said the South American source, which last week was also involved in negotiations with the EU-28 ahead of the Buenos Aires round in March.

“The purpose of this trip and technical talks to Brussels was precisely to get ready for Buenos Aires and concentrate in the chapters of government procurement, market access, animal and plant sanitary measures plus services and investments”, added the source.

European Commission sources indicated that negotiations agreed “to intensify the technical work” in anticipation of Buenos Aires but also working on a tentative timetable of reaching an agreement at the end of the year. This last leg of EU/Mercosur negotiations took off in 2010, following several years of suspension.

Sources: Agência Brasil, Mercopress Agency