U.S. Establishes USMCA Panel Regarding Mexico’s GMO Corn Import Restrictions, While Global Grain Production Forecast as Second Largest on Record

Reuters writer David Lawder reported yesterday that, “The United States on Thursday escalated its objections to Mexico’s curbs on genetically modified corn imports, requesting a dispute settlement panel under the North American trade pact, the U.S. Trade Representative’s office said.

“The request to send the dispute to arbitrators was announced after formal consultations failed to resolve deep divisions between the two close trading partners over use of genetically modified (GM) corn, widely produced by U.S. farmers.”

The Reuters article stated that, “Mexico’s Economy Ministry said it would defend its GM corn policies before the dispute panel, saying on the social media platform X that they ‘are consistent with trade obligations.'”

Washington alleges that Mexico’s decree banning imports of GM corn used in dough and tortillas for human consumption is not based on science and violates its commitments under the U.S.-Mexico-Canada Agreement on trade launched in 2020.

Lawder noted that, “If the panel rules in favor of the U.S. and Mexico fails to comply with its directives, USTR could ultimately win the right to impose punitive tariffs on Mexican goods, which could spark a rare North American trade war.”

And Bloomberg writer Eric Martin reported yesterday that, “The US Trade Representative’s office on Thursday said it’s establishing a dispute resolution panel under the US-Mexico-Canada Agreement. The panel of trade experts — whose findings are binding — would be charged with deciding whether Mexico’s corn policy is inconsistent with the trade pact. If the group sides with the US, it could ultimately result in tariffs on Mexican goods.

“US Trade Representative Katherine Tai had requested formal talks on the issue with Mexico under the trade pact in early June, starting an initial 75-day clock that expired Wednesday.”

Martin added that, “American officials have repeatedly criticized the Mexican government’s prohibition on GMO corn for human consumption, calling the policy unscientific. Imports of GMO corn for animals is allowed, although USTR is concerned that the Mexican government intends to phase that out as well.”

“Although the bulk of the corn that Mexico imports is used as animal feed, the vast majority of US corn is genetically modified, leaving growers concerned about losing a major market for their products,” the Bloomberg article said.

An online update on Thursday from The Wall Street Journal editorial board indicated that, “U.S. agriculture secretary Tom Vilsack said in September that the U.S. had been trying to ‘persuade’ Mexico that a ban would be ‘catastrophic.’ But in February AMLO [President Andrés Manuel López Obrador] repeated his intention to ban GMO corn imports. In March the U.S. asked for consultations.

“Those talks went nowhere, and the two sides have gone back and forth with competing offers seeking a compromise. But Mexico keeps imagining that GMO corn is some kind of health threat despite decades of safe use. Under pressure from U.S. farmers, the U.S. trade rep said Thursday it is ‘establishing a dispute settlement panel under’ the USMCA over GMO corn. A ruling will take months and if Mexico loses it will have to modify its decree or be subject to tariff retaliation.

“The U.S. decision to confront AMLO’s assault on free trade is long overdue.”

Elsewhere, Reuters writer Naveen Thukral reported today that, “In news, the International Grains Council on Thursday raised its forecast for 2023/24 global corn production, with an improved outlook for Ukraine’s crop only partially offset by a downward revision for China.

“The inter-governmental body, in a monthly report, put global corn production at 1.221 billion metric tons, up from a previous forecast of 1.220 billion tons and the prior season’s 1.160 billion tons.”

And Dow Jones writer Yusuf Khan reported yesterday that,

Global production of wheat, corn and other grains is set to rise to the second-highest level on record, according to the International Grains Council.

“Total production for 2023-24 is forecast at 2.294 billion metric tons of grains, the IGC said in its monthly report on Thursday. This represents a rise from 2.263 billion tons the prior year, though it is just shy of the record set in 2021-22 of 2.295 billion tons.

“The forecast was lowered from a previous outlook made in July when 2.297 billion tons had been expected for the year. The revision was due to lower than expected barley and oat production, the IGC said.”