Farm and biotech groups cheered when U.S. Trade Representative Katherine Tai announced the Biden administration would take on Mexico in a dispute over Mexican biotech corn restrictions, but the process is likely to stretch on for months.
Teams of government lawyers and specialists from both countries will likely be writing briefs and counter-briefs, making written and oral arguments and choosing judges through the summer and fall. Groups including the National Corn Growers Association and U.S. Grains Council say they are confident that, in the end, they are on the winning side.
“I think that, based on the science, we have a very strong case,” says USGC Director of Trade Policy Andrew Brandt.
Meanwhile, U.S. and Mexican government officials are now preparing to square off in dispute consultations, the first phase of the dispute process under the U.S.-Mexico-Canada Agreement.
The two countries have 30 days to start talking and 75 days to finish discussions over the U.S. complaint that Mexico is barring its tortilla makers from using flour made from genetically modified corn, blocking the approvals of new genetically modified seed traits and steering the country to eventually stop importing all GM corn from the U.S.
Doug McKalip, USTRIf the countries fail to reach a mutually accepted resolution, the U.S. has the option to request that a panel of three or five judges take the case.
Tai, in a statement last week, said she’s hopeful the dispute can be resolved during the consultations, but that would be a first. The U.S. has entered dispute consultations with a USMCA partner twice so far – both in complaints against Canada – and neither produced a resolution.
While both U.S.-Canada disputes are vastly different than the U.S.-Mexico spat, all of them have in common two sides that are dead-set on prevailing. Both of the U.S-Canada cases – the latest of which is still being contested and has gone before a panel – revolve around U.S. claims that Canada is blocking adequate access to its dairy market.
“We didn’t expect that consultations would resolve the issue," said Shawna Morris, senior vice president for trade policy at the U.S. Dairy Export Council and National Milk Producers Federation. “Canada never makes any changes on dairy unless it’s forced to.”
Mexico’s Ministry of Economy, the primary agency that will be facing USTR in the dispute consultations involving biotech corn, has made it clear that it’s ready to “defend Mexico's position."
Contralínea, a Mexican periodical, said in a tweet that it’s counting on the ministry to “defend the native (corn) against the genetically modified (corn) promoted by the US administration.”
The primary argument coming from the U.S. is that Mexico is not following proven science when it comes to biotech crops.
Mexico says it’s trying to keep out GM corn in order to protect the cultural and dietary heritage of the country. Beyond that, the Ministry of Economy is arguing that the U.S. has no reason to complain because Mexico doesn’t need imports of white corn for the country’s tortilla production.
The Mexican ministry, perhaps foreshadowing its strategy in the months to come, on Friday said that it is rejecting U.S. claims that its presidential decree blocks U.S. white corn exports because there aren’t any.
“Through a constructive dialogue, the Ministry of Economy, together with other agencies of the Government of Mexico, will demonstrate with hard data and evidence that … the exclusive use of native corn for masa and tortilla has no (effect) or commercial interest for the United States, given that Mexico produces twice as much white corn as it destines for tortillas …”
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Although Mexico may technically be self-sufficient in white corn production under an ideal scenario for the government, the country’s farmers also export much of it to customers in Central and South America. Mexico imposed a 50% export tax on white corn in an effort to staunch those exports, but it’s unclear how effective that has been. What is certain is that the U.S. has been exporting white corn to Mexico 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.
But U.S. white corn exports to Mexico are just a part of the reason the U.S. is challenging Mexico, says Chief U.S. Agricultural Trade Negotiator Doug McKalip.
“It’s not just standing up for corn growers – it’s standing up for all of agriculture and the principle of science and making sure that governments operate the way they are supposed to, and market access is based on real analyses and real outcomes and not something else,” McKalip said Monday at the Agri-Pulse Food and Ag Issues Summit West in Sacramento.
Mexico is also saying that it hopes the dispute can be resolved in the coming consultations, but the two countries have already had initial “technical consultations” under a separate chapter of USMCA and both sides remain adamant that they are on the right side.
“If USTR can solve this in this round of consultations – where Mexico drops this decree and moves away from saying biotech corn is unsafe for human consumption – that would be great, but the history of the last six months would suggest that’s probably a tall order,” said Brandt.
Still, Mexico has shown signs previously that’s its willing to be flexible, said McKalip. The February decree that banned imports of GM white corn replaced a previous presidential decree that would have banned all GM corn imports.
“Quite frankly, they could have gone the other direction and worsened their decree on biotech, but instead they’ve taken steps to try to open up for … yellow corn … to ensure commerce between the two countries,” he told Agri-Pulse.
But if the two sides cannot reach an agreement during the 75 days of consultations, the U.S. can request a panel to rule on the dispute. The default panel under USMCA rules is made up of five members, but the disputing countries can opt for a three-member panel.
The U.S. and Mexico will each choose two of the judges for a five-member panel, but they must each choose citizens from the other country. Both sides must agree jointly on the fifth panelist – the chairman.
What’s still unknown is whether Canada, a country fully supportive of genetically modified crops, will join in. The Canadians participated in the first set of technical consultations under the sanitary and phytosanitary chapter of USMCA and they could join both the current dispute consultations and a subsequent panel fight.
“I would certainly rather double team an adversary … than play one-on-one,” McKalip said about the prospect of Canada joining the dispute. “We certainly welcome Canada’s involvement on this, and we will continue to engage with them.”
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