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Corn dispute escalates

The United States government has escalated its trade dispute over proposed Mexican limits on GM or genetically modified corn, asking on Monday for formal consultations with Mexico on the issue.

The US Trade Representative’s office announced it has called for consultations with Mexico over proposed rules that would ban GM corn for human consumption; Mexico says it could eventually ban it for animal feed as well.

The trade representative’s office said the ban could “threaten to disrupt billions of dollars in agricultural trade”.

Mexico is the leading importer of US corn, most of which is genetically modified. Almost all is fed to cattle, pigs and chickens in Mexico, which doesn’t grow enough feed corn to supply itself.

Mexico argues that GM corn may have health effects, even when used as fodder, but hasn’t presented proof. If the issue isn’t solved in consultations, it could lead to a dispute resolution panel or trade sanctions under the US-Mexico-Canada free trade agreement, known as the USMCA.

“The United States has repeatedly conveyed our serious concerns with Mexico’s biotechnology policies and the importance of adopting a science-based approach that complies with its USMCA commitments,” US Trade Representative Katherine Tai said in a statement.

“Mexico’s policies threaten to disrupt billions of dollars in agricultural trade, and they will stifle the innovation that is necessary to tackle the climate crisis and food security challenges if left unaddressed,” according to the statement.

Mexico’s Economy Department stressed in a statement on Monday that the issue is not yet a trade dispute, though consultations are the first step in that process, and expressed confidence it could be worked out.

Mexico had previously appeared eager to avoid a major showdown with the United States on the corn issue — but not eager enough to completely drop talk of any ban.

In February, Mexico’s Economy Department issued new rules that dropped the date for substituting imports of GM feed corn. Some imported corn is also ground into meal for use in corn chips or other snacks.

Under a previous version of the rules, some US growers worried a GM feed corn ban could happen as soon as 2024 or 2025.

While the date was dropped, the language remained in the rules about eventually substituting GM corn, something that could cause prices for meat to skyrocket in Mexico, where inflation is already high.

US farmers have worried about the potential loss of the single biggest export market for US corn. Mexico has been importing GM feed corn from the US for years, buying about US$3-billion worth annually.

The new rules still say Mexican authorities will carry out “the gradual substitution” of GM feed and milled corn, but set no date for doing so and says potential health issues will be the subject of study by Mexican experts “with health authorities from other countries”.

“Regarding the use of genetically modified corn for animal feed and industrial use, the date for prohibiting its use has been eliminated,” the Economy Department said in the statement. “Working groups will be set up with the domestic and international private sector to achieve an orderly transition.”

Mexico was where corn was first domesticated starting around 9,000 years ago, and in order to protect its native varieties, the country will still ban imports of GM seed corn.

Mexico will also prohibit the use of GM corn for direct human consumption, which in Mexico consists mainly of fresh white corn and white corn tortilla flour. Mexico has no need to import white corn from the United States, where most corn is yellow or sweet corn.

The United States has also been angered by Mexico’s limits on foreign and private electrical power plants in Mexico, but the US government has not yet taken that issue to the USMCA dispute resolution process.

The United States says Mexico is unfairly favoring its state-owned electricity and oil companies over American competitors and clean-energy suppliers. Canada also has joined in that complaint. Mexico says it is protecting a majority share of its domestic energy market for the state-owned power company.


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