Mexico: New anti-inflation plan temporarily slashes food import regulations

8% price reduction

On 3 October, Mexico’s President Lopez Obrador and Finance Minister Rogelio Ramírez de la O announced a new agreement between Mexico’s Government and fifteen private companies, aimed at fighting food price inflation. The so-called Opening Agreement against Inflation and Scarcity (APECIC), which will remain in force until February 2023, aims to reduce the prices of 24 basic goods (mostly food items) by 8%. As part of the agreement, the 15 private signatory companies will be temporarily exempt from the Mexico’s official import procedures and permits for food and food packaging, as implemented by Mexico’s food safety and health regulatory authorities. The agreement also includes a ban on Mexico’s exports of white corn, beans, sardines, and some food packaging materials, as well as a suspension of the development of new regulations that would impede trade or increase food import costs.

The food items covered by the agreement include the food items canola or corn oil, paddy rice, canned tuna, brown sugar, beef, onions, jalapeño peppers, pork chops, dry beans, white chicken eggs, roma tomatoes, milk, lemons, apples, oranges, sliced bread, potatoes, pasta, whole chicken, canned sardines, corn tortillas and carrots. For the list of private companies that have signed the agreement and are exempt of import procedures and permits, see the USDA report below this article.

Food safety and trade dispute risks

Even though Mexico’s Ministry of Agriculture and Rural Development announced its Plant and Animal Health service SENASICA will work closely with the 15 signatory companies to ensure food safety for Mexican consumers, critics of the agreement point to food safety risks for consumers. They also warn of potential trade disputes with the USA and Canada – its partners in the USMCA North-American free trade agreement, as the agreement unilaterally restricts Mexican exports of certain items. Critics also claim that measures that promote technological and productivity improvements in Mexico’s agricultural sector would be more beneficial than the measures included in the agreement. Other critics argue the agreement is discriminatory, as only the 15 signatory companies will be exempt from import regulations, whereas other companies will continue to be subject to these regulations.

Food price inflation

The announced agreement is the second of its sorts this year. In May of 2022 a first agreement was announced, in which import duties were slashed for a number of food items. Despite this previous plan, year-on-year food price inflation in Mexico had reached 13,27% in the first half of September 2022 (compared to 8,76% for overall inflation).