Article by Eric Pinheiro, International Relations Advisor at CNA
Expanding the Economic Complementation Agreement No. 53 (ECA 53) between Mercosur and Mexico represents a strategic opportunity to strengthen regional agribusiness. Diversifying markets, reducing tariff barriers, and facilitating trade are key to improving the competitiveness of the South American bloc’s agricultural products and meeting the increasing demand from the Mexican market.
Opportunities for Agribusiness and Benefits for Mexico
Mercosur, led by Brazil and Argentina in agricultural production, is one of the largest global food exporters, with soybean, meat, corn, sugar, fruits, and biofuels standing out. For its part, Mexico is one of Latin America’s most open economies, with a robust agro-industry and increasing demand for quality inputs.
For Mexico, expanding ECA 53 could mean more competitive access to essential inputs for its production chains, such as soybean for animal feed and sugar for the food industry, as well as high-quality products for local consumption, such as ethanol-based biofuels and meat to supply domestic demand. In addition, diversifying suppliers can add to the resilience of the trade balance and price stability of Mexican products — as has been illustrated since 2022 by the Programa contra la Inflación y la Carestía (PACIC), which allowed zero-tariff imports to curb the inflation of food products.
Current Trade Flow and Tariff Setting
Despite its potential, agribusiness trade between Mercosur and Mexico is still relatively limited. In 2024, Brazil exported US$ 2.93 billion in agricultural products to Mexico, mainly soybean meal, chicken meat, and sugar.
Mexican imports from the whole agricultural sector exceeded US$ 40 billion, showing room for growth relating to Mercosur exports. Much of this untapped potential is due to the high tariffs and limited tariff setting of the current ECA 53.
Tariffs currently implemented by Mexico, according to SIAVI:
· Beef – up to 25%, depending on the cut;
· Chicken meat – from 20% to 75%;
· Soybean meal – 5%, which may be exempt under specific systems;
· Soybean oil – up to 20%;
· Raw sugar – up to 30%, with limited preferential import quotas;
· Ethanol – up to 20%, without preferential treatment under ECA 53.
Expanding the agreement could include significant tariff preferences for these products, increasing trade predictability and regular access to the Mexican market.
PACIC Expansion Benefits and Results
During PACIC’s validity, Mexico temporarily reduced the import tariff on 66 essential products, including food and fuels, causing a direct impact on stemming inflation. The program showed that opening trade can benefit the population without hampering local production.
An expansion of ECA 53 based on economic criteria would make it feasible to institutionalize these benefits, bringing legal and commercial predictability to companies on both sides.
Moreover, regulatory and technical cooperation between the countries can favor adherence to international standards of quality, traceability, and sustainability, thus increasing the competitiveness of South American products in exacting markets.
Economic Impacts and Strategic Outlook
For Mercosur producers, the expansion of ECA 53 could represent:
· Creating greater income stability and reduced dependence on concentrated markets;
· Fostering investment in infrastructure and innovation in the countryside;
· Creating direct and indirect jobs in the agro-industry.
For Mexico, this is a chance to diversify its imports, improve its food and energy security, and expand access to quality products at more competitive prices, which is crucial in a global context of price instability and inflationary pressures.
Conclusion
The expansion of ECA 53 between Mercosur and Mexico is a win-win strategy. Deeper integration between these two producing and consuming regions can strengthen Latin American agribusiness, boost trade, reduce vulnerabilities, and promote sustainable development.
Based on PACIC’s results, trade data, and the productive complementarities between the parties, the timing is right to prioritize this negotiation. It’s not just about opening markets, but about developing a solid partnership with real economic, social, and environmental benefits.