As my first post, I'll shorten and discuss a recently published paper of mine about the very recent US/Mexico Genetically Modified
Corn trade dispute.
So What's the Fuss About?
The trade dispute between the United States and Mexico under the United States-Mexico-Canada Agreement (USMCA) primarily centers on Mexico's policy changes regarding genetically modified (GM) corn, influenced by President Andrés Manuel López Obrador's administration. The core issue arises from Mexico's Presidential Decree issued in February 2023, which imposes restrictions on the use of GM corn (to take effect in 2024). Mexico justifies these actions as necessary to protect health, the environment, and food security, and to promote self-sufficiency.
This prohibits
the use of GM corn in products for human consumption
the use of GM corn in products for animal consumption
restrictions on glyphosate and glyphosate-containing agrochemicals
much wider array of agricultural products containing GM corn traces
President López Obrador's administration has taken these steps in response to various concerns. Before NAFTA, Mexican agriculture, particularly corn farming, was a sustainable source of livelihood for many small-scale farmers. However, NAFTA led to a significant influx of subsidized U.S. corn into Mexico, causing local corn prices to plummet and negatively impacting Mexican farmers. NAFTA was credited with costing Mexico upwards of 900,000 agricultural industry jobs. This economic shift resulted in the loss of farming jobs and increased migration to the U.S.
The corn trade between the United States and Mexico, spanning the years 2018 to 2020, was characterized by a significant exchange of both white corn and genetically modified corn-related products. Mexico emerged as a major player in this trade, exporting an annual average of approximately 1.4 million metric tons of white corn during this period. In contrast, the United States, as the primary supplier, exported an average of 15.1 million metric tons of corn (including natural and GM) annually to Mexico, with an estimated export value of $2.8 billion. This substantial trade relationship positions Mexico as the leading foreign buyer of U.S. corn, representing around 25% of total U.S. corn exports and contributing to approximately 4% of the entire U.S. corn production.6 Notably, U.S. corn imports from Mexico were relatively modest, averaging about 37,000 metric tons annually.
The cultural significance of corn (maize) in Mexico is also a critical factor. Corn is deeply intertwined with Mexican culture and sustenance. Efforts to preserve landrace corn varieties, central to Mexico's agricultural and cultural heritage, have led to movements against GMOs and the protection of native strains from genetic contamination. The Mexican government's measures reflect an effort to protect these traditional varieties and assert food sovereignty.
The U.S. contends that these measures, as per Ambassador Katherine Tai, lack a scientific foundation and contravene the agreed-upon market access provisions within the USMCA.12 The dispute arises from concerns over Mexico's biotechnology policies, which the U.S. asserts are not grounded in scientific principles, deviating from the established regulatory framework that ensures the safety of agricultural biotechnology. Agriculture Secretary Tom Vilsack emphasizes the importance of resolving these concerns to maintain fair access for American farmers to the Mexican market and to facilitate the use of innovative tools in addressing climate and food security challenges.13 The U.S. has exhausted diplomatic avenues, engaging extensively with Mexico on the matter, and is now leveraging the dispute settlement mechanisms provided by the USMCA to enforce compliance and address the perceived inconsistencies in Mexico's biotechnology measures. Other prospective complaints could include that Obrador's decree lacks a valid (in their belief) scientific basis or that it's arbitrary, a prerequisite stipulated by the SPS Agreement. And while not listed in the USTR's official request for a panel the complaint will likely utilize USMCA Sanitary and Phytosanitary (SPS) Chapter (Article 9.6.14). Which states:
If a Party has reason to believe that a specific sanitary or phytosanitary measure adopted or maintained by another Party is constraining, or has the potential to constrain, its exports and the measure is not based on a relevant international standard, guideline, or recommendation, or a relevant standard, guideline, or recommendation does not exist, the Party adopting or maintaining the measure shall provide an explanation of the reasons and pertinent relevant information regarding the measure upon request by the other Party.
Why Are We Seeing So Many 3rd Parties Show Interest?
The US-Mexico corn dispute under the USMCA also involves important legal aspects related to the General Agreement on Tariffs and Trade (GATT) and the USMCA's own provisions. One notable point is that certain chapters of the USMCA are direct carbon copies of articles from the GATT, highlighting the influence of established international trade laws on newer trade agreements like the USMCA.
More specifically, USMCA Chapter 32 is modeled after GATT Article XX. GATT Article XX allows for exceptions to the trade rules set out in the North American trade agreement, particularly for measures necessary to protect public morals, human, animal or plant life or health, and national treasures. As a case of first impression here (for purposes of an Article 32 defense), this article is crucial as it provides legal grounds for countries to implement trade restrictions for reasons beyond mere economic considerations.
At this moment, neither party has stated the exact articles under which they'll be respectivelly indicating as relevant, due to the dispute panels title being "Mexico's Agricultural Biotechnology Measures," there is a high likelihood the above will be utilized.
Whatever, the Panel's outcome, this case serves to not only affect a large contingent of North American agricultural trade, but also to represent potential persuasive authority for countries to consider in GATT disputes.
Where Do I See this Going?
The resolution of the USMCA corn dispute between the United States and Mexico over genetically modified (GM) corn will likely have substantial and far-reaching implications, not only for the two countries involved but also for global agricultural practices, trade policies, and cultural preservation.
One potential outcome is a compromise. The United States might agree to stricter regulations or labeling requirements for GM corn exports, aligning with Mexico's concerns about GMOs and cultural preservation. This could lead to a gradual shift in U.S. agricultural practices towards non-GM or organic corn varieties, influencing the global agricultural market and potentially increasing consumer demand for non-GM products. On the other hand, Mexico may agree to allow certain GM corn imports under stringent conditions, mitigating the impact on U.S. corn exports. This compromise could set a precedent in international trade, where cultural and environmental concerns are given greater consideration alongside economic interests.
Alternatively, if the dispute leans heavily in favor of the United States, it could reinforce the status quo of GM crop dominance in global agriculture, potentially leading to increased tensions over food sovereignty and cultural preservation. This outcome might encourage other countries to prioritize economic interests over environmental and cultural concerns in trade agreements, potentially leading to a homogenization of agricultural practices worldwide. However, it could also spark a global movement advocating for the protection of indigenous crops and cultural heritage, possibly resulting in stricter international regulations on GM crops.
Conversely, a ruling in favor of Mexico would signify a landmark victory for proponents of cultural preservation and food sovereignty. It could embolden other nations to implement similar measures, challenging the dominance of GM crops and paving the way for a more diverse and sustainable agricultural landscape. This scenario could lead to a reevaluation of the role of GM crops in global agriculture, potentially influencing future trade agreements to incorporate provisions that protect cultural products and prioritize environmental sustainability.
Regardless of the outcome, the dispute is likely to influence future discussions on international trade, agriculture, and cultural preservation. It highlights the need for a delicate balance between economic development and the protection of cultural heritage and environmental sustainability, setting the stage for future trade negotiations and policy decisions. The resolution of this dispute could be a defining moment in how the world approaches the complex interplay between tradition and scientific progress.
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