Economics: Fruitless consultations give way to US and Canada's convening a trade panel over Mexico's restrictions on imports of GM corn

MEXICO - Report 28 Aug 2023 by Mauricio González and Francisco González

The Office of the United States Trade Representative (USTR) escalated on August 17 its objections to Mexico's curbs on genetically modified corn imports by requesting a dispute arbitration panel to address its objections to Mexico's curbs on imports of genetically modified (GM) white corn for the production of tortillas and corn flour destined for human consumption. The ban in question had been formalized in a presidential decree published by the Government of Mexico on February 13 of this year. Canada will be joining in these dispute proceedings as a third party, as its trade and agriculture ministers announced late last week.

The panel calendar calls for its chairperson to be appointed by September 6, followed by the appointment of the panelists between September 6 and 21. The preliminary report is to be released no later than February 18, and the panel’s final report is due March 19, 2024. The claim the US is making before the panel is that Mexico is violating the treaty in two areas: a lack of scientific evidence to underpin the provisions of the February 13 decree and the ban on corn imports. The Ministry of Economy responded that "the national regulation is consistent with the commitments subscribed in the Treaty" and that "the challenged measures do not affect trade."

As far as commercial effects are concerned, it is true that their current impact is limited (the import of white corn for human consumption from the US is marginal), but for Washington the most important aspect is that the import ban could increase to all types of GM corn and other grains, while 95% of all the soybeans Mexico imports is GM; all its canola imports are GM and come from Canada. Specialists predict that Mexico will lose in the panel, leaving the US free to adopt compensatory measures that could take into account any current impact (admittedly minor), or potential impacts, which diverse sources estimate could total between 5 and 15 billion dollars, by imposing tariffs on other products exported by Mexico to the US, especially agricultural and agro-industrial products.

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