Uruguay, Mexico Forge Agreement on Canola Grain Exports

Uruguay and Mexico have reached a binding agreement on phytosanitary requirements for the export of canola grain, with shipments set to commence by the end of June, the Uruguayan Ministry of Foreign Affairs announced on Monday. 

Following a successful consultation process with the World Trade Organization (WTO), the flow of canola grain exports from Uruguay to Mexico is expected to start on June 27, pending any final comments. The mutually agreed-upon requirements pertain to the entry of canola grain for consumption and industrial purposes, the ministry said in a statement. 

The agreement represents a significant milestone in bilateral trade relations between the two countries. Mexico, the fourth-largest global importer of canola grain, imported a staggering US$754 million worth in 2022. This substantial demand presents a lucrative export opportunity for Uruguayan producers poised to tap into Mexico's flourishing agricultural market. 

The Ministry of Foreign Affairs of Uruguay highlighted the collaborative efforts between the two countries, as well as the joint coordination among the Ministry of Livestock, Agriculture and Fisheries and the Uruguayan Embassy in Mexico, which contributed to the successful resolution of the phytosanitary requirements. 

Uruguay's export sector has faced challenges in recent months, with a 26% decline in goods exports (excluding to free trade zones) reported in April compared to the same period in 2022, according to the Union of Exporters of Uruguay. However, with seeds and oleaginous crops ranking as the third-most exported product at 11.5%, there is potential for growth. Diversifying trade relationships and exploring new markets, including Mexico, are critical tools to revive Uruguay's export industry. 

Furthermore, recent export data from Uruguay XXI, the country's Investment, Export, and Country Image Promotion Agency, reveals that canola and carinata grains accounted for 1.6% of total goods exports (including data from free trade zones) from January to April 2023. Seeds and oleaginous crops remained strong, ranking third in the export sector behind timber and meat. 

The agreement with Mexico allows Uruguay to expand its agricultural exports and reduce its dependence on traditional trade partners. Brazil claimed the top destination for Uruguayan exports in April, accounting for 21% of shipments, and China secured the second spot with 15.5%. Mexico currently occupies the 14th position with a 1.1% share. Strengthening trade ties with Mexico will allow Uruguay to tap into its import market and bolster its export portfolio, according to SICE numbers. 

As the canola grain export initiative gains momentum, Uruguay and Mexico aim to foster more vital trade collaboration and capitalize on emerging economic opportunities. Continued communication and exploration of potential areas of economic cooperation will be essential as the countries work towards sustainable growth and increased market diversification. 

With the agreement on phytosanitary requirements, Uruguay is poised to solidify its position in the global agricultural market and strengthen its presence in Mexico. The export of canola grain presents a promising avenue for expanding Uruguay's agricultural sector, contributing to the country's economic development.