Carlos Fernandez Gonzales ANHEUSER BUSCH - DIRECTORS

Carlos Fernandez Gonzales is the Vice Chairman of the Board and Chief Executive Officer of Grupo Modelo, S.A. de C.V.  This is a Mexican brewing company dealing with brewing related issues.  Mr Gonzales has been on the board since 1996 and acquired significant shareholdings as the tables below indicate.

Carlos Fernandez Gonzalez

In addition to the U.S. and Canadian markets, companies within the agricultural sector are also looking to expand into Asia. Grupo Modelo, a Mexican beer company that sells its products in more than 150 countries and is currently the eighth-largest beer producer in the world, has been bullish on the Asian market for quite some time.

"Asia is a place of a lot of opportunities," says , vice chairman and CEO of Grupo Modelo, world-recognized for their beer Corona. "You have big markets with a lot of opportunity, as well as smaller ones. It has everything."

Juan Gorgallo Costa, general manager of Grupo Minsa, one of the main players in the Mexican, Latin American, and U.S. food markets, couldn’t agree more: "We expect the whole Pacific Rim to be a free-trade zone, and we’ll certainly support that. I think that Asian markets will eventually develop a taste for corn-based products."

AGRICULTURE: WAKING UP WITH A HANGOVER

In 1997, the recently privatized Mexican sugar industry issued dumping complaints against U.S. producers of high fructose corn syrup (HFCS), citing damage to sugar producers because U.S. companies were compelling soft drink bottlers and food-processing companies to switch from sugar to HFCS. Mexico established steep countervailing duties, as well as quotas to U.S. HFCS producers, including AE Staley, Archer Daniels, and Cargill, among others. As a response, the U.S. formally requested the World Trade Organization (WTO) to intervene, with the WTO deciding that HFCS is not, in fact, entering Mexico at dumping prices.

While according to the WTO Mexico has no reason to impose countervailing duties on HFCS, the Commerce Secretariat has not changed its position. Mexico did not appeal the WTO’s decision within the required 60-day period, citing the need to evaluate the damage done by HFCS imports to the sugar industry. Although the United States has recently relaxed its stance somewhat to allow Mexican sugar into the market, the quantity hasn’t been enough to appease the main Mexican players, which include Grupo Escorpion, Beta San Miguel, Zucarmex, and GAM (in order of decreasing market share). Meanwhile, the conflict continues.

The sugar dispute between the United States and Mexico is rather symbolic of the sector as a whole, which has struggled to adapt to a market recently opened to global competition. Of all the sectors in the Mexican economy, agriculture is perhaps the most problematic. While total exports have increased significantly, agriculture exports have not faired as well, growing by only 8 percent. As federal subsidies begin to diminish, many critics of the Zedillo administration complain that the sector has been opened to competition too quickly. Indeed, since the Salinas years, the industry has been steadily weaned from government support in order to distance it from the earlier goal of self-sufficiency.

Without a doubt, the most vital free-trade agreement for the growth of the sector has been and will continue to be the NAFTA. To say the least, NAFTA has created a very positive environment for Mexican agriculture producers. Mexico enjoys a comparative advantage in the production of fruits and vegetables, and NAFTA has facilitated access for these products into U.S. and Canadian markets. At the same time, better access to agro-industrial machinery and equipment have enabled Mexico’s industry to increase its competitiveness and productivity.

Along with Mexico’s higher agricultural productivity levels resulting from structural reforms in the 1990s, market access provided by NAFTA has helped to boost Mexican agricultural exports to the North American region. More than 80 percent of all of Mexico’s produce goes to the United States and Canada. U.S. total trade of agricultural products with Mexico has increased from US$6.3 billion in 1993 to US$10.5 billion last year.

In terms of export growth between 1993 and 1999, Mexican agricultural exports to the United States increased 79 percent, while U.S. exports to Mexico expanded more than 56 percent. During this period, Mexican agricultural exports to Canada grew more than 100 percent.

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