U.S. Trade Panel Rules Against Mexico's GM Corn Restrictions

By David Lawder

WASHINGTON (Reuters) – A trade-dispute panel ruled on Friday that Mexico's restrictions on U.S. genetically modified corn exports violate the U.S.-Mexico-Canada Agreement, granting the Biden administration a significant trade victory as it nears the end of its term.

The U.S. Trade Representative's office announced the USMCA dispute settlement panel ruled in favor of all seven U.S. legal claims in this long-standing case. The panel determined that Mexico's corn restrictions are not scientifically supported and breach USMCA chapters on sanitary measures, market access, and national treatment.

The three-member panel's final report advised Mexico to realign its corn trading policies with the agreement, giving it 45 days to comply. Non-compliance could lead to punitive duties on specific exports to the U.S.

Mexico's economy and agriculture ministries issued a joint statement expressing disagreement with the ruling but committed to respecting it, without detailing any forthcoming actions. They stated, "The Government of Mexico does not agree with the Panel's decision, as it considers that the measures in question are aligned with the principles of public health protection and the rights of Indigenous peoples."

However, they acknowledged that dispute resolution is a critical aspect of the USMCA trade deal, reminiscent of last year's case where Mexico and Canada prevailed over the U.S. regarding automotive rules.

The corn dispute began shortly after USMCA came into effect in July 2020 when then-President Andres Manuel Lopez Obrador decreed a ban on GM corn by the end of 2024, primarily affecting U.S. corn exports, a policy supported by his successor President Claudia Sheinbaum.

Following years of stalled negotiations, USTR requested arbitration to resolve the issue, contesting Mexico's 2023 decree prohibiting GM corn in tortillas and directing agencies to phase out its use in other foods and animal feed.

The U.S. countered that Mexico's claims regarding GM corn's health impacts lacked scientific backing.

U.S. Trade Representative Katherine Tai stated, "The panel's ruling reaffirms the United States' longstanding concerns about Mexico’s biotechnology policies and their detrimental impact on U.S. agricultural exports." U.S. Agriculture Secretary Tom Vilsack added that the ruling secures U.S. farmers' and exporters' access to the Mexican market, labeling it a victory for agricultural biotechnology.

In February, Mexico's government eased its initial restriction on GM corn, permitting its use for livestock feed and industrial products but maintaining the ban on tortillas.

Mexican officials have defended these restrictions, asserting that it is the U.S.'s responsibility to prove its exports do not jeopardize human health. Meanwhile, President-elect Donald Trump has signaled potential tariffs on imports from Canada and Mexico unless illegal migrations and fentanyl trafficking are curtailed, which could result in another dispute over USMCA compliance.

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Mexico, recognized as the origin of modern corn, prohibits GM corn planting due to contamination concerns for native corn strains. Nonetheless, it remains the largest importer of U.S. yellow corn, nearly all of which is genetically modified.

For the 2023/24 agricultural season, Mexico anticipates importing a record 22.3 million metric tons, with the U.S. exporting $4.8 billion worth of corn to Mexico from 2024 through October, according to U.S. Census Bureau figures.

Mexico recognizes over 60 native corn varieties, or landraces, distinguished by their vibrant colors and unique flavors.

This month, Deputy Economy Minister Luis Rosendo Gutierrez affirmed the government’s commitment to upholding the free trade pact amidst tariff threats from Trump, confirming Mexico's intent to comply with the panel's ruling.

U.S. and global agriculture and biotechnology organizations praised the panel's decision, emphasizing that upholding free-trade agreements is vital for nurturing innovation and securing food stability. According to Emily Rees, president of CropLife International, the ruling signals that maintaining free-trade agreements fosters an environment conducive to growth and stability.