U.S. may have muscle in a trade fight, Mexico may have the law
Posted on February 22, 2023
If your best international customer–someone who accounts for 27 percent of your overseas sales–gave you three years to change the recipe of what it buys from you, it’s a safe bet you’d work together to meet their needs and deadline.
Not Big Agbiz, however, which is pushing, pressing, and prodding the Biden Administration to squeeze Mexico, America’s biggest corn export market, to drop its plan to ban genetically modified (GM) corn imports by 2024.
The standoff, over two years old, is getting heated as the U.S. and Mexico each point to national sovereignty while simultaneously maintaining they’re following the international trade rules both agreed to in the 2020 U.S.-Mexico-Canada Agreement, or USMCA, the NAFTA update.
For its part, Mexico has “sought to promote the biodiversity of Mexican corn varieties and reduce the herbicide glyphosate to protect public health,” wrote Sharon Anglin Treat, a senior attorney at the Institute for Agriculture & Trade Policy (IATP), last March. Mexico issued a “presidential decree” on Jan. 1, 2021, that called for “a phase-out of glyphosate and genetically modified corn by January 2024.”
When it became obvious Mexico meant what it had been saying for two years, the U.S. agbiz network kicked into hyperdrive to muscle the U.S. Department of Agriculture (USDA) to talk tough with its Mexican counterparts.
When muscle failed, the agbiz gang went brainy: It commissioned a dense economic study that showed–to no one’s surprise–how a Mexican ban of American GM corn would cause “catastrophic impacts on U.S. and Canadian farmers and on Mexico’s own food security,” noted Tim Wise, an IATP senior advisor and senior research fellow at Tufts University, in a January review of the report.
“It projected massive price spikes, market chaos, and billions of dollars of lost output for U.S. corn farmers. Mexico would see its economic output fall by US$19.39 billion, with an annual loss of 56,958 jobs, reducing labor income by US$2.99 billion.”
But, advised Wise, “Don’t believe a word of it” because while the study is “attributed to a ‘coalition of leading food and agricultural stakeholders’” in both nations, it “was actually commissioned by CropLife, the biotech trade association and greatly overstates the impacts of the ban.”
The report’s “catastrophic” numbers did, however, motivate some farm state politicians to “express concern” about Mexico’s plan–years after it was announced by Mexican President Andres Manuel Lopez Obrador. Many, like Iowa’s Rep. Randy Feenstra, demanded USDA “hold the Mexican government accountable for banning biotech corn imports in violation of the USMCA…”
In mid-December, a Mexican delegation in Washington, D.C. to discuss the proposed GM corn ban, offered “to delay the January 2024 deadline to 2025, and maybe beyond, for feed corn,” noted Wise in his January story.
A month later, in a trilateral summit between the U.S., Mexico, and Canada, President Joe Biden raised the pending GM corn ban with President Lopez Obrador. Biden, however, was politely, but firmly, rebuffed.
Mexico is standing pat because, first, it already has offered to delay its GM corn deadline one year, until Jan. 1, 2025 and, second, it has signaled it would discuss an import ban on GM corn used only for human consumption while allowing imported GM corn used to feed livestock. If that deal could be struck, it would remove most–maybe all–the ban on 95 percent of the U.S. corn now exported to Mexico.
Moreover, several trade attorneys like Anglin Treat believe the USMCA trade deal gives Mexico every right “to take what it deems to be appropriate precautionary measures to protect public health and the environment,” including a “ban on agricultural biotechnology.”
To preclude an even bigger fight–and maybe a huge loss–over the USMCA language, the U.S. should take what Mexico now offers: an extra year to negotiate a GM-corn-for-feed deal that would assure an overwhelming share of today’s U.S. corn exports to its best corn customer.
After all, the customer is always right even when it’s only 95 percent right.
© 2023 ag comm