Late last year, the U.S. government began to push back on a decree by the government of Mexico that would ban importation of corn with biotech traits such as insect resistance as well as the herbicide glyphosate, by the beginning of 2024. Interestingly, this decree was actually announced on New Year’s Eve of 2020 by Mexican President Andres Manuel Lopez Obrador, but because the decision was taken during the chaotic transition between the Trump and Biden administrations, public reaction from both U.S. stakeholder groups and U.S. officials was delayed for almost two years. The delay in Senate confirmation of two key U.S. officials involved in agricultural trade, Under Secretary of Agriculture for Trade and Foreign Agricultural Affairs Alexis Taylor and Chief Agricultural Negotiator Doug McKalip, also likely slowed the U.S. response.
It is worth noting that this dispute is not the first time that the Mexican government has sought to put restrictions on cultivation and/or trade in GM corn, in an effort to protect their smallholder farmers who grow traditional varieties of corn (or maize, as it is known outside the United States). In 1998, the Mexican government barred cultivation of GM corn within the country, but in 2008 began to allow such cultivation under an experimental permitting process in some parts of the country that are not designated as being ‘centers of origin’ for the crop. As of 2018, permits for experimental production of GM corn had been granted in 14 Mexican states (out of 32 total), primarily in the northern and eastern portions of the country. It is believed that large numbers of Mexican farmers plant GMO corn without permits as well.
In the original decree, the language was unclear as to whether the 2024 ban was to apply to all corn imports or only those used directly for food consumption. Over the last five years, Mexico has imported more than 15 million tons (610 million bushels) of U.S. corn on average, according to data reported by the U.S. Department of Agriculture. Although no records are maintained as to what share of that corn includes biotech traits, we do know that more than 90 percent of U.S. corn grown in 2022 fell into that category. Most of that corn was used for industrial processing or livestock feed–an estimated 20 percent of U.S. corn exports to Mexico is white corn destined for food use, while some yellow corn is also destined for direct production of corn-based foods such as tortillas. In the U.S. grain distribution system, non-GMO grain is typically comingled with GMO grain unless the contract specifies that it be segregated and identity-preserved, which raises the price.
The DeKalb seed company offers white corn seed varieties that are genetically engineered for herbicide tolerance. It is estimated that up to 40 million bushels of white corn is exported annually from the United States, most of it going to Mexico. Most of it includes biotech traits like the DeKalb varieties.
Agriculture Secretary Vilsack and his Mexican counterpart Victor Villalobos discussed the issue informally in October 2022 when both of them were in Iowa to attend the World Food Prize event, and U.S. Trade Representative Katherine Tai raised it in meetings with Mexican officials the following month. This issue was also one of the first matters tackled by Agriculture Under Secretary Taylor and Ambassador McKalip after they were finally sworn into office in late December 2022 and early January 2023 respectively. Both of them traveled together to Mexico City to tackle this issue in late January.
In mid-January, the government of Mexico provided a revised version of their decree to U.S. trade officials in an effort to resolve the dispute. It included delaying the implementation of the ban on GM corn imports for food consumption until 2025, while implicitly allowing imports for other purposes to continue. The U.S. government rejected the proposed changes as inadequate, and formally requested that the government of Mexico provide a written explanation of the scientific justification for the proposed ban. In early March, the Office of the U.S. Trade Representative formally requested consultations on this matter under the food safety chapter of the USMCA trade agreement, which is typically the first step in seeking a dispute resolution panel that would consider the legality of the Mexican proposed action under the agreement., although not all consultations end up in formal dispute resolution.
In January 2023, the Mexican government imposed a temporary 50 percent export tax on white corn. President Lopez Obrador is determined to take steps to keep the product in-country to be processed into tortillas and other traditional corn-based Mexican foods. The tax is supposed to be in place through June 2023.
