Dive Brief:
- U.S. Trade Representative Katherine Tai last Friday said her agency filed a dispute settlement under the trilateral U.S.-Mexico-Canada Agreement in response to Mexico’s efforts to limit imports of genetically modified corn.
- Mexico said in February it would ban genetically modified corn in tortillas or dough, and encourage the gradual substitution of biotech corn in animal feed and other products for human consumption. The bulk of its U.S. corn imports are destined for animal feed.
- This is the latest step from the U.S. to mitigate challenges surrounding Mexico’s biotechnology policies, which critics say have no scientific merit and threaten to disrupt U.S. exports to one of the leading markets for corn.
Dive Insight:
The request for technical consultations ramps up trade tensions between the U.S. and Mexico, and could potentially lead to new tariffs. The USTR argued in a filing Mexico is violating its commitment to ensure measures are “based on relevant scientific principles” and an “approval procedure that requires a risk assessment.”
The dispute between the two trade partners stemmed from a 2020 decree by Mexican President Andrés Manuel López Obrador that sought to ban biotech corn and end the use of herbicide glyphosate by January 2024 for health and environmental reasons.
In prepared remarks, Tai said Mexico’s biotechnology policies threaten to disrupt U.S. exports and “stifle agricultural innovation that helps American farmers respond to pressing climate challenges, increase farm productivity, and improve farmers’ livelihoods.”
Tai added that the latest USTR action comes after extensive talks and attempts to resolve concerns over Mexico’s biotechnology policies. The U.S. is considering all options to resolve the matter, including through certain rights enforceable under the USMCA.
Mexico's Economy Ministry said it plans to counter U.S. arguments. If the talks fail, the U.S. can form an independent panel to investigate, submit their findings, and rule on the measures, which ultimately could lead to tariffs on products from Mexico.
The National Corn Growers Association praised the decision from the USTR last week, saying in a statement that Mexico's actions have "threatened the financial wellbeing of corn growers and our nation’s rural communities.”
In 2022, U.S. corn exports totaled $18.61 billion in value, USDA data show. Mexico comprised 26% of the value, or $4.92 billion, second only to China. Most corn in the U.S. is considered a GMO and created to resist insect pests or certain herbicides, according to the U.S. Food and Drug Administration.
