Panel to Decide If Mexico Corn GMO Stance Violates USMCA

The U.S. has initiated the formation of a dispute settlement panel over Mexico's decree to not allow biotech corn for tortillas and directive to the administration to gradually substitute genetically modified corn in processed foods and in animal feed.

“Through the USMCA dispute panel, we seek to resolve our concerns and help ensure consumers can continue to access safe and affordable food and agricultural products. It is critical that Mexico eliminate its USMCA-inconsistent biotechnology measures so that American farmers can continue to access the Mexican market and use innovative tools to respond to climate and food security challenges," U.S. Trade Representative Katherine Tai said Aug. 17, announcing the move. She emphasized that despite the conflict, "there are many areas where we will continue to cooperate and work together.”

Agriculture Secretary Tom Vilsack said, "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."

Mexico's Economy Secretary responded to the announcement saying that the ministry will defend Mexico's position at the panel, and will demonstrate that the regulation is consistent with the commitments it made in the trade deal, and that the measures being challenged don't have commercial consequences. It will be supported by food and environmental regulatory agencies in the government.

The vast majority of U.S. corn exported to Mexico is GMO, but it is used for animal feed or processed foods, not for tortillas. There is no ban on this corn, just a goal to find alternatives to GMO corn for those markets. The February decree was softer than an earlier decree from Mexico's president, which would have banned all GMO corn imports by 2024.

According to the National Corn Growers Association, 3.6% of U.S. corn exports to Mexico were white corn; as a result of the decree in February, white corn is now just 0.6% of corn exported to Mexico. Through May, corn export volumes overall are down almost 5%, with 60% of the decline in white corn.

Before the decree, the U.S. provided 97% of Mexican corn imports.

Mexico's statement said that according to panel timelines set out in USMCA -- which Mexico calls T-MEC -- a decision will be released sometime in 2024. It said one of the advantages of T-MEC is that there are clear rules to resolve disagreements between trading partners, and thereby bring certainty to all parties.

The top Democrat on the House Ways and Means Committee, who was chairman as the Donald Trump administration shepherded USMCA through Congress, noted that Democrats pushed for binding dispute panels in the NAFTA rewrite. Under NAFTA, any country could block a panel from forming.

"USTR rightfully is relying on these improved enforcement mechanisms to ensure that Mexico abides by its trade obligations," Rep. Richard Neal, D-Mass., said.

Iowa is one of the top states for exporting corn to Mexico. Sen. Chuck Grassley, R-Iowa, tweeted, "Good news USTR is finally using USMCA 2call in panel of trade experts 2 resolve US-Mexico dispute over GMO corn If the experts need proof GMO corn is OK u can look at me Im a longtime human laboratory for GMOs bc I’ve been eating for 30yrs Mexico's ban is unscientific & anti-trade."

Nebraska, which exports nearly all of its corn to Mexico, is the home of the House Ways and Means Trade Subcommittee chairman. Rep. Adrian Smith, R-Neb., said, "I’m glad the Biden administration finally decided to fully deploy these enforcement mechanisms, but it’s disappointing the president has yet to speak about this and show solidarity with U.S. corn producers."

National Corn Growers Association President Tom Haag said after the announcement: “U.S. officials have exhausted every avenue trying to resolve this conflict and are left with no other choice but to turn to a third-party panel in hopes of quickly rectifying this issue. We are deeply appreciative of USTR for standing up for America’s corn growers.”