Canada has long recognized export opportunities outside of North
America and is working to expand market access in the EU and other
emerging markets such as China, Russia, Indonesia and India through
the Comprehensive Economic and Trade Agreement and Trans-Pacific
Partnership and other bilateral trade negotiations.
While that is important, as consultants to the food and beverage
processing industry we have to ask: what about taking full
advantage of markets in which Canada has already entered into free
trade agreements? What about Mexico, a country whose largest bread
maker, "Grupo Bimbo", is looking to acquire Maple Leaf
Foods' Canada Bread for $1.83 billion? Is this move indicative
of a strong Mexican economy and an attractive marketplace for
Canadian food processors? Should we be more proactive in
capitalizing on markets like Mexico where we already have
established open access?
This year, it is North American Free Trade Agreement's
(NAFTA's) 20th anniversary, and Canada-Mexico bilateral
agriculture and agri-food trade has been growing consistently since
NAFTA came into effect.
Mexico is Canada's fourth largest food trade partner. In 2011,
Canada exported $1.72 billion of agri-food products to Mexico, with
the top five exports being canola seed, non-durum wheat, fresh
boneless beef, canola oil and canary seed. But there are ample
unexploited opportunities for Canada's food and beverage
processors in the world's 13th largest importer of agri-food
products — and they are ripe for the picking.
With a population of 112 million and a GDP of $1.1 trillion in
2011, of which the agriculture sector accounted for 3.8 per cent,
Mexico is the 14th largest economy in the world and the second
largest in Latin America. Mexico's income per capita is almost
30 per cent higher than Brazil's, roughly twice as high as
China's and four times higher than India's. The average
population age in Mexico is just 26 years. By 2030, the working
population will reach 62 million, almost the entire population of
the U.K. This gives Canadian food processors a large population of
consumers with incomes to spend, and provides a stable workforce at
competitive wages.
Mexico also has an excellent business environment. According to the
"Doing Business 2013" publication of the World Bank,
Mexico ranks in 48th place out of the 185 economies compared on its
business environment, performing better than Brazil, China and
India. It offers a strong agricultural sector and a good business
climate for Canadian companies. In addition, manufacturing costs
are low and have been consistent, offering a major incentive for
doing business there.
In recent years, Mexico has also increased investment in education.
With greater levels of education come higher-paying jobs, leading
to a growing consumer market for Canada. Getting into the market
now could therefore result in even higher returns in the
future.
Overall, Mexico provides Canadian processors with opportunities in
a market that is close, mature and showing signs of economic
growth. So, what about Mexico?
This article originally appeared in Food in Canada.
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