US escalates trade dispute with Mexico over limits on genetically modified corn

The U.S. government said Thursday it is formally requesting a dispute settlement panel in its ongoing row with Mexico over its limits on genetically modified corn.

Mexico's Economy Department said it had received the notification and would defend its position. It claimed in a statement that “the measures under debate had no effect on trade,” and thus do not violate the United States-Mexico-Canada free trade agreement, known as the USMCA.

The U.S. Trade Representatives Office, or USTR, objected to Mexico’s ban on GM corn for human consumption and plans to eventually ban it as animal feed.

The USTR said in a statement that “Mexico’s measures are not based on science and undermine the market access it agreed to provide in the USMCA."

The panel of experts will now be selected and will have about half a year to study the complaint and release its findings. Trade sanctions could follow if Mexico is found to have violated the U.S.-Mexico Canada free trade agreement.

The U.S. government said in June that talks with the Mexican government on the issue had failed to yield results.

Mexico wants to ban biotech corn for human consumption and perhaps eventually ban it for animal feed as well, something that both its northern partners say would damage trade and violate USMCA requirements that any health or safety standards be based on scientific evidence.

Mexico is the leading importer of U.S. yellow corn, most of which is genetically modified. Almost all is fed to cattle, pigs and chickens in Mexico, because Mexico doesn’t grow enough feed corn. Corn for human consumption in Mexico is almost entirely domestically-grown white corn, though corn-meal chips or other processed products could potentially contain GM corn.

Mexico argues biotech corn may have health effects, even when used as fodder, but hasn’t yet presented proof.

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. The new rules say Mexican authorities will carry out “the gradual substitution” of GM feed and milled corn, but sets 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.”

Under a previous version of the rules, some U.S. 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.

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