Deadlock over Mexican GMO corn ban as ag officials urge strong action

There will be no easy exit from the Mexican corn maze. Top United States ag trade officials have rejected the latest Mexican proposals to resolve a dispute arising from the decision of Mexican President Lopez Obrador to enforce a ban on importing genetically modified corn into Mexico, set to begin in 2024.

Corn industry leaders held a Capitol Hill briefing Feb. 1 and they praised the tough line recently taken by top U.S. trade negotiators in Mexico City on the proposed corn ban. “This decree would cut most American corn growers off from what has historically been our largest export market,” National Corn Growers Association President Tom Haag said after the briefing. “That’s why it is extremely important that U.S. officials continue to ensure that Mexico lives up to its commitments under the U.S.-Mexico-Canada Agreement.”

Haag was joined on the panel by Andy Jobman, a farmer and chairman of the NCGA; U.S. Rep. Adrian Smith, R-NE; and Jason Hafemeister, acting deputy for trade at the U.S. Department of Agriculture. The panelists talked about the important role biotech corn plays in crop production and the harm that would come if farmers were to move away from biotech corn.

“We have been clear with the Mexicans that this really needs to be solved,” Hafemeister noted. “It’s not the kind of thing that is easily compromised because it is about science, it’s about the law, it’s about economics. So, we are asking them to look at those instruments and reform them.”

Mexico is the largest destination for U.S. corn exports, followed by China. Mexico accounted for 27% of all U.S. corn exports in marketing year 2021-22 by volume, according to USDA. U.S. Secretary of Agriculture Tom Vilsack, with the support of U.S. farm groups, has threatened to open legal action against Mexico under the United States-Mexico-Canada Act, the trilateral trade pact that replaced the North American Free Trade Act under former President Donald Trump.

USDA undersecretary for trade and foreign agricultural affairs Alexis Taylor and U.S. Trade Representative Chief Agricultural Negotiator Doug McKalip announced the deadlock Jan. 23 after meeting with Mexican government officials in Mexico City.

“U.S. officials continue to engage with our Mexican counterparts at the highest levels to address our grave concerns with Mexico’s biotechnology policies,” Taylor and McKalip said.

“We appreciate the active engagement between U.S. and Mexican government officials following U.S. Agriculture Secretary Tom Vilsack’s trip to Mexico in November, and the proposed modifications to the presidential decree shared by Mexico at the end of 2022. However, these changes are not sufficient and Mexico’s proposed approach, which is not grounded in science, still threatens to disrupt billions of dollars in bilateral agricultural trade, cause serious economic harm to U.S. farmers and Mexican livestock producers, and stifle important innovations needed to help producers respond to pressing climate and food security challenges.”

The proposed ban, over which U.S. and Mexican officials have been sparring for years, follows years of activism by Mexican corn nativist groups that have initiated multiple lawsuits against multinational ag corporations, some of which have gotten favorable rulings from Mexican judges. One such group is called “Sin maiz, no hay pais” (without corn, there is no country). Mexico uses domestically grown white corn for products meant for human consumption, like tortillas, while having allowed, up until now, imported U.S. GM corn to feed cattle and other livestock.

A study commissioned by U.S. and Mexican ag interests and released in October forecast economic damage to all three North American economics—Mexican, American and Canadian—if the ban goes through. The study by the Biotechnology Innovation Organization claimed that over a 10-year period, a Mexican ban on GM corn would cause the U.S. economy to lose $73.89 billion in economic output, and gross domestic product would contract by $30.55 billion. Additionally, the U.S. would lose 32,217 jobs annually with labor income falling $18.38 billion.

In addition, the U.S. corn wet milling industry would suffer $7.65 billion in losses over the 10-year forecast period, and the U.S. ethanol industry (including DDGS) would incur a net loss of $521.5 million after accounting for gains from lower GM corn prices.

While high trade officials negotiate, it’s business as usual for groups that promote U.S. corn and other grains in Mexico and elsewhere overseas. In January, the U.S. Grains Council reported that a long-planned visit by a U.S. delegation met with Mexican ranchers in the country’s southeast to tout the benefits of distillers’ dried grains, the high-protein byproduct of ethanol refining. The council confirmed that the DDGS being discussed are GM.

Mexican livestock growers are among the domestic ag groups that oppose Lopez Obrador’s proposed GM corn ban. The BIO study forecast that the ban would cause Mexican poultry meat prices to rise by 66.7% and would make eggs a luxury item. The Mexican livestock sector would contract as Mexican consumers choose imported animal protein products produced more cheaply using GM corn in the U.S.

Mexico’s GDP would fall by $11.72 billion over 10 years, the study forecast, and economic output would be reduced by $19.39 billion. There would be an annual loss of 56,958 jobs, which would reduce labor income by $2.99 billion.

Not all U.S. corn growers are dreading the impending import ban on GM corn. Joe Maxwell, CEO and founding president of Farm Action, said Vilsack is closing off a “premium market” for U.S. non-GM corn producers. “The Department of Agriculture during this time period has done nothing to help move farmers towards a premium market, more money in their pockets, and we think that’s a mistake and a failed, missed opportunity,” Maxwell said in December.

David Murray can be reached at [email protected].