LDN - Business

US wins ruling in a trade dispute with Mexico over its bid to ban genetically modified corn

[December 21, 2024]

MEXICO CITY (AP) — The United States won a ruling on Friday in a trade dispute with Mexico, which had sought to ban imports of genetically modified corn for human consumption.

U.S. growers, who had worried about the potential loss of the single biggest export market for U.S. corn, welcomed the decision, calling it “a major win.”

Mexico’s Economy Department said it disagreed with the ruling by a panel of experts convened under the U.S.-Mexico-Canada free trade agreement, known as the USMCA, but said it would abide by it.

"The Mexican government does not agree with the panel’s finding, given that it considers that the measures in question are aligned with the principles of protecting public health and the rights of Indigenous communities," Mexico’s Economy Department said. “Nonetheless, the Mexican government will respect the ruling.”

Mexico has been importing genetically modified corn from the U.S. for years, buying about $3 billion worth annually. The corn is mainly used to feed livestock in Mexico but the country announced plans for a ban on human consumption in 2020, including a possible future ban on GM corn for livestock as well.

The U.S. government formally requested the dispute settlement panel over Mexico's limits on genetically modified corn in 2023. Mexico had long claimed “the measures under debate had no effect on trade,” and did not violate the trade agreement.

The U.S. Trade Representatives Office, or USTR, objected to Mexico’s ban on GM corn for human consumption and plans to eventually ban it as animal feed.

The USTR said Friday that the panel agreed with the U.S. on all legal claims, "finding that Mexico’s measures are not based on science and undermine the market access that Mexico agreed to provide in the USMCA."

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The decision was met with praise from the U.S. National Corn Growers Association. “This outcome is a direct result of the advocacy efforts of corn grower leaders from across the country," said the association's president, Kenneth Hartman Jr.

Mexico is the leading importer of U.S. yellow corn, most of which is genetically modified. Almost all is fed to cattle, pigs and chickens in Mexico, because Mexico doesn’t grow enough feed corn.

Corn for human consumption in Mexico is almost entirely domestically-grown white corn, though corn-meal chips or other processed products could potentially contain GM corn.

Mexico argues biotech corn may have health effects, even when used as fodder, but hasn’t yet presented proof. It had previously appeared eager to avoid a major showdown with the U.S. on the issue — but not eager enough to completely drop talk of any ban.

In early 2023, Mexico’s Economy Department issued new rules that dropped the date for substituting imports of GM feed corn. The new rules say Mexican authorities will carry out “the gradual substitution” of GM feed and milled corn, but sets no date for doing so and says potential health issues will be the subject of study by Mexican experts “with health authorities from other countries.”

Under a previous version of the rules, some U.S. growers worried a GM feed corn ban could happen as soon as 2024 or 2025.

While the date was dropped, the language remained in the rules about eventually substituting GM corn, something that could have caused prices for meat to skyrocket in Mexico, where inflation is already high.

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