Paper reproduction signed by Cepea researchers is allowed provided the following is mentioned: author's name, author's professional qualification and affiliation to Cepea as well as the publication date on this page.

Potential and challenges of trade relationship between Brazil and Mexico

Over the last years, Brazil has made efforts to boost trades with Mexico through agreements to reduce or even eliminate import fees between the two countries. Moreover, Mexico has also shown interest to deepen commercial relationships with Mercosur, especially with Brazil. These efforts resulted in the Economic Complementation Agreement (ACE 53), established between Brazil and Mexico in August 2002, that eliminated or reduced tariffs between both countries for approximately 800 products. In 2002, two other agreements were stablished, ACE 54 and ACE 55, both in the Mercosur sphere.


More recently, Brazil and Mexico have promoted negotiation rounds to widen and deepen the ACE 53. The need to further commercial partnerships became more urgent for the Mexican government due to the revocation of the Transpacific Partnership by the North-American government and threats of changes in Nafta (North-American Free Trade Agreement). As a result, Brazil and Mexico have reinforced the importance to improve the commercial relationship and investments between two major economies in Latin America. There are discussions regarding access to markets and rules of origin, as well as negotiation of trade facilitation, services and investments, health and phytosanitary measures, governmental purchases, technical barriers to trade, intellectual property, regulatory consistency, competition policy and trade defense.


Trades between the countries have increased over the last years; nevertheless, the share of Brazilian sales in total Mexican importations was only 1% in 2015. Likewise, Brazilian purchases accounted for roughly 1% of total Mexican exportations and amounted 4.4 billion dollars in that year, which shows that there is room to strengthen the commercial partnership between the two countries.


Data of the Ministry of Development, Industry and Foreign Trades indicate that, between 2000 and 2016, Brazilian shipments to Mexico increased 128%, while Brazilian importations of Mexican products rose 368%. The value of products that Brazil imported from Mexico jumped from only 754 million dollars in 2000 to 3.5 billion dollars in 2016. The trade balance, which was favorable to Brazil from 2000 to 2008, presented deficit between 2008 and 2015, indicating that Brazil is an important commercial partner for Mexico. Mexico is the seventh main destination for Brazilian products and industrial products account for 80%, approximately, of the Brazilian sales to that country – the main item are automotive vehicles.


However, many products should have their taxes reduced and agricultural products are important candidates in trades that are not yet in the agenda of purchases of Brazilian products by Mexico.


Regarding shipments of Brazilian agribusiness, in 2016, of 86 billion dollars of revenue generated, only 97 million dollars corresponded to sales to Mexico. The main Brazilian products sold to Mexico were cellulose, fruits and products classified as plant production, namely pepper and juice, among others. The preference to trade soybean, corn, sugar and meat (broiler, pork and beef) is from the United States. In 2015, Mexico spent more than 9 billion dollars purchasing soybean, corn, soybean oil, wood products, coffee, sugar and meat. More than 95% of Mexican importations of soybean, soybean oil and corn, besides 80% of sugar purchases and more than 80% of Mexican meat importations had the United States as origin.


Therefore, the possible deterioration of relationships between the two other countries that comprise Nafta will benefit the Brazilian agribusiness, one of the major suppliers of products that Mexico currently purchases from the United States. Besides, Mexico is an important purchaser of high-added value, namely wood, cellulose, fruits and meat. The volume of trades that Mexico might offer to the Brazilian agribusiness will depend on its commercial relationships with the United States, since there is a strong commercial dependency between the two North-American countries. Data on trades between Mexico and the United States show that, in 2015, the United States was the main origin of Mexican importations, at 188 billion dollars. Likewise, the United States was also the main destination of Mexican products and sales reached 291 billion dollars in that year.

23/09/2020 - Influence of emotional factors caused by the coronavirus pandemic on cattle trades - Shirley Martins Menezes 23/09/2020 - Agribusiness, pandemics and the world economy - Geraldo Barros 16/09/2020 - Rice price increases bring relief to producers, but it does not cover losses over the last 5 crops - Mauro Osaki e Renato Garcia Ribeiro 03/09/2020 - Changes in consumption habits during quarantine may remain after social isolation - Fernanda Geraldini Palmieri 17/08/2020 - Covid-19 crisis affects cassava sector in different ways - Fábio Isaías Felipe 04/08/2020 - Rural Brazil: Covid-19, income and emergency aid - Nicole Rennó Castro and Geraldo Sant'Ana de Camargo Barros 28/07/2020 - Limited demand due to covid-19 presses down ethanol quotes, despite lower production - Ivelise Rasera Bragato Calcidoni 01/07/2020 - Blitzkrieg on agribusiness: what to expect? - Heloisa Lee Burnquist 30/06/2020 - Chinese purchases from Brazil create optimism and alerts - Thiago Bernardino de Carvalho 26/06/2020 - Covid-19: opportunities and challenges for the fruit and vegetable sector - Margarete Boteon 22/05/2020 - Covid-19 and the agricultural input market - Mauro Osaki 22/04/2020 - Agribusiness exports during coronavírus pandemic - Andreia de Oliveira Adami 17/04/2020 - Economic epidemiology in evidence - Sílvia Helena Galvão de Miranda 31/03/2020 - Family company survival depends on efficient succession - Gabriela Garcia Ribeiro 13/02/2020 - Risk of planting second crop reduces area use in South Brazil - Lucilio Rogerio Aparecido Alves

Preencha o formulário para realizar o download
Deseja receber informações do Cepea?

Type this code in the field next to