The Mexican government continues to minimize U.S. concerns over President Andrés Manuel López Obrador's restriction on genetically modified white corn, but the threat of the constraint is real, and damages are already accruing, according to American farm groups.

Mexican officials insist that their country doesn't need to import white corn from the U.S. — most of which is grown from GM seeds — so the Mexican restriction that went into place on Feb. 13 will cause no damage to American farmers.

That’s just not the case, says Matt Rush, who grows corn, wheat and soybeans in Fairfield, Illinois. Rush also is vice president of the Illinois Corn Growers Association.

AP_March_23_AMLO_Andres_Manuel_Lopez_Obrador.jpgMexican President Andres Manuel López Obrador (AP Photo /Marco Ugarte)

Rush has dedicated between one-half and one-third of his corn acres to white corn for the past five years, but the Mexican ban may change that, if premiums continue to drop as they did when López Obrador published the country’s latest anti-GM corn decree.

The decree does not strictly ban GM white corn, but it comes close. As of Feb. 13, Mexican tortilla makers are no longer allowed to buy GM white corn. A government official told Agri-Pulse Mexico is not testing imports for traces of GM corn, but the decree had an immediate impact on the market.

“I sold white corn on Feb. 14 and today that bid just the premium — is 63% less than what it was,” said Rush, who uses GM corn seeds.

That’s a bad indicator for the white corn he just finished planting in April. Rush said he considered changing course, but he’s already purchased the seeds and stressed that he’s holding out hope that the Office of the U.S. Trade Representative will initiate and win a dispute with Mexico under the U.S.-Mexico-Canada Agreement.

“I already had the seeds,” Rush said. “Bought them in October and I just stayed the course and planted what I usually plant, hoping that USMCA gets worked out.”

But it’s still very unclear if that will happen.

Tom Haag 2021.pngTom Haag, NGCA

The Office of the USTR announced on March 3 that it was requesting “technical consultations” with Mexico under the Sanitary and Phytosanitary Measures chapter of USMCA. It was a procedural step that could lead to a formal dispute, but has not so far.

Starting April 7, which was 30 days after the beginning of the technical consultation period, the U.S. was allowed to request dispute consultations under the USMCA. The technical consultation period was used for just one round of face-to-face meetings in Mexico City.

Corn growers are desperate to know what the next move by USTR will be, says National Corn Growers Association President Tom Haag.

“We can’t just let this continue to fester,” he told Agri-Pulse.

But inaction is exactly what Mexico is hoping for.

Mexican Undersecretary of Foreign Trade Alejandro Encinas Najera, in recent correspondence with Deputy USTR Jayme White and Chief Agriculture Negotiator Doug McKalip, stressed that Mexico does not believe trade is being affected.

“The decree bans the use of genetically modified corn for masa and tortilla,” he said. “The foregoing does not represent any (effect on} trade or imports since, among other reasons, Mexico is self-sufficient in the production of GMO-free white corn. What this is about is consolidating said sovereignty and food security in relation to a staple product in the culture of Mexicans.”

U.S. exports of white corn to Mexico have been growing for years.

The U.S. exported just 9,422 metric tons of white corn in 1988, according to an analysis produced by Kansas State University. Eleven years later, sales to Mexico rose to 1 million tons. In 2022, the U.S. exported 1.6 million tons.

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Mexico has historically exported white corn, and the Mexican government is trying to curtail that to meet domestic needs. In mid-January — about a month before the decree was unveiled — the government slapped a temporary 50% tax on white corn exports.

“In order to guarantee a sufficient supply, it is necessary to maintain national production in our country and ensure market conditions that allow stabilization of its price,” the government said.

Left unsaid was that Mexico could also rely on imports to make up for what its farmers export.

Mexican Deputy Agriculture Minister Victor Suarez is doubling down on claims that the decree is having no impact on the U.S.

The decree, Suarez said in a recent interview with Reuters, “does not affect U.S. corn producers in any way. It is the U.S.' own agricultural and trade policies, as well as its food development model, which distorts prices and creates gaps between small-scale producers and large transnationals.” 

While it’s obvious that there have been damages to U.S. farmers, proving such harm isn't critical to the USMCA dispute process, said one U.S. industry analyst who asked not to be named because he’s not authorized to comment.

“A violation is a violation,” the analyst said. “If you prove that the measure is in violation of a country’s obligation, it doesn’t matter whether you’ve shown damages or not.”

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