The following is a guest post by Ernesto Hernández-López, a professor of law at Chapman University's Dale E. Fowler School of Law who frequently writes about international trade and agriculture. Opinions are the author’s own.
A bid by Mexico to ban genetically modified corn for human consumption has sparked a trade dispute with the U.S. as farm exporters raise alarm bells that they could be locked out of a major trade market. But a closer look at the debate shows that the U.S.' arguments are grasping at straws.
In a 2023 presidential decree, Mexico outlawed GMO corn for human consumption, out of concern for human health and biodiversity. The U.S. quickly invoked a trade panel under the United States-Mexico-Canada Agreement in August, arguing the ban violates the trade pact’s chapter on food safety, called sanitary and phytosanitary measures (SPS) under trade law.
In June, the panel had hearings over two days: There were nearly 600 pages, over 750 exhibits, and almost 2,000 footnotes in legal filings. The U.S. and Mexico raised over twenty treaty provisions plus exceptions focused on resource conservation and protections for indigenous communities.
Let’s start with the obvious. The decree does not impact corn in animal feed, which is what American farmers overwhelmingly grow and export to Mexico. It only affects white corn used in tortillas and masa, or dough, which Mexico is self-sufficient in growing.
The result: the ban has no significant impact on corn trade. Various figures confirm this, including the fact that corn exports to Mexico have risen to record levels since the ban. Mexico remains the top buyer of U.S. corn, three times higher than the number two Japan. The U.S. Department of Agriculture forecasts more increases in exports to Mexico for next year, driven by livestock demand.
The 3 problems with US arguments
Beyond the trade implications, the U.S.' own reasoning in this dispute is thin.
First, the U.S. exaggerates what the Mexico decree does, devising a problem it calls “substitution instructions.” This regards replacing GMO corn in animal feed. The U.S. complaint is that decree instructions are unclear. In hearings in June, American lawyers explained their worry. They said that without clear instructions from Mexico on replacing GMO corn for animal feed, growers could not prepare for the next season.
The problem with this argument is the decree does not require any form of substitution. It explicitly says that Mexico’s sanitary risk commission continues approving GMO corn for animal feed, so long as it is not for tortillas or masa.
Second, there is no immediate risk of Mexico banning GMO corn for animals, contrary to what the U.S. argues. Article 8 sets the parameters to one day substitute GMO corn for animal feed, but also outlines the parameters necessary for the country to implement any new restrictions. Conditions include determining national food security and studying impacts on human health. They are prerequisites to formulating and applying any replacement. They come beforehand.
In filings since January and in proceedings last month, Mexico explained that these parameters have not occurred. Because of this, it has not set any date for substituting GMO corn for livestock, much less issued any guidance.
Third, the panel can set aside most American complaints around Mexico's ban supposedly violating SPS commitments. Mexico's “substitution instructions” are not SPS measures. They do not fall within food safety obligations of the USMCA.
An SPS measure is defined as any measure “applied to” protect human health or plant life from pests, diseases and “risks arising from additives, contaminants, toxins or disease-causing organisms in food.” The USMCA uses this definition from the World Trade Organization's SPS Agreement, which determines what falls inside or outside trade obligations.
The definition of SPS measures emphasizes “applied to,” extending trade obligations to actual actions. Otherwise, a country could be in violation of trade rules for hypothetical policies. Not fair. Point in fact: the decree. Mexico has not started any substitution for GMO corn in animal feed.
In sum, Mexico has not employed anything to replace GMO corn for livestock. The practical result is the panel cannot examine a long list of complaints about GMO corn in animal feed, making U.S. arguments largely moot.
This is one part, but an important part, of the many issues before the panel. And it's clear this issue isn't going away: It’s American election season until November. In Mexico, a new President enters office in October. She promises to keep up this defense.
Many American grievances are irrelevant to the panel, and, for that reason, the U.S.should drop the case. Instead of senseless bickering, it could help corn farmers and promote exporting non-GMO corn to Mexico. Trade officials should get out of their rabbit hole and notice the premium demand just across the border.
