US calls for dispute panel in spat with Mexico over corn trade

August 18, 2023

The U.S. has requested a dispute settlement panel under the United States-Mexico-Canada-Agreement over Mexico’s plan to ban genetically modified corn imports.

Mexican officials have been working to ban the use of herbicides and genetically modified corn, specifically in products made for human consumption, from its food supply chain.

Thursday’s request to send the dispute to USMCA arbitrators came after formal negotiations failed to resolve deep divisions between the two close trading partners.

“The United States is taking the next step in enforcing Mexico’s obligations under the USMCA,” U.S. Trade Representative Katherine Tai said in a new release. “Mexico’s approach to biotechnology is not based on science and runs counter to decades’ worth of evidence demonstrating its safety and the rigorous, science-based regulatory review system that ensures it poses no harm to human health and the environment.”

Genetically modified organisms were introduced in U.S. crops in the 1990s to resist pests, tolerate herbicides and grow using less water. More than 90% of corn harvested in the U.S. is genetically modified, according to the U.S. Department of Agriculture.

Mexican President Andres Manuel Lopez Obrador said his country would abide by the USMCA panel’s decision. Obrador also said he welcomes the panel, since it gives his country an opportunity to produce evidence that herbicides are harmful to food supply chains.

“I think it will be very important because it is not just a matter of Mexico, it is a matter that will help consumers in the U.S. and around the world,” Obrador said Friday morning during a news conference in Mexico City. “It’s good that they are now challenging our decree so that we don’t use that corn for human consumption, because this will allow us in this panel to present evidence and make proposals.”

However, Obrador reiterated that his administration would not allow genetically modified corn into Mexico’s food supply chain.

“We are not going to allow [genetically modified] corn to be used to feed the people of Mexico … and we are going to abide by the resolution of [the USMCA panel],” Obrador said.

Mexico began imposing a 50% tariff on white corn exports entering the country from the United States on June 24 and it will remain in place through the end of the year. Obrador said the tariff was aimed at cutting the country’s reliance on imports and boosting national production of corn.

According to the U.S. officials, any interruption to corn exports could severely affect U.S. farmers in corn-producing states, including Iowa, Nebraska, Illinois, Minnesota and Indiana.

“Mexico’s decision is a clear violation of the USMCA, and the U.S. must hold Mexico accountable to their science-based commitment. Our farmers are already facing high input costs, the last thing they need is uncertainty about their top export market,” U.S. Sen. Joni Ernst, R-Iowa, said in a statement.

Mexico has been one of the main buyers of corn produced in the U.S. for decades. Mexico imported $4.9 billion worth of corn in 2022, behind China, which imported $5.2 billion, according to data from the USDA.

The bulk of U.S. corn exports to Mexico are shipped either from the Port of New Orleans via container ship, or by truck from the port of entry in Laredo, Texas.