Mexico
Representatives from the U.S., Mexico and Canada will meet in Cancun, Mexico this week to discuss a series of disputes, including Mexican energy and biotech policies and Canadian dairy barriers.
Mexico reached an agreement with food manufacturers to use only non-GMO corn in tortilla production across the country. The government says it plans to implement new import tariffs on white corn imports.
Over the 29 years of free trade, U.S. ag exports to Mexico increased both in terms of volume and value, although there were some years where growth was not positive.
Mexico claims because it is self-sufficient in GMO corn for food, it has not violated any trade agreements. Given the firm stances of both countries, it appears this situation will lead to a USMCA dispute settlement.
It may seem like years ago, but it was just this past June when farmers reported selling $8 cash corn and $18 cash soybeans. Today, cash prices look much different–hovering around $5.50 for corn and $13 for soybeans.
According to researchers at Ohio State University, most U.S. states will experience a “limited effect” of the dispute in the short term. But the long-term could significantly impact states such as Illinois.
By requesting consultations, the U.S. Trade Representative began a process to come to a settlement on ag biotechnology imports to Mexico. If a settlement is not reached, the issue will move to a full-blown trade dispute.
Mexico is accusing the U.S. of playing politics over the GMO corn issue, but NCGA CEO Neil Caskey says if Mexico wants non-GMO, they’ll need to pay a premium for it instead of violating a trade pact already in place.
The U.S. appears to be pursuing a case via USMCA on the matter: “That is going to happen, because we’re essentially in a circumstance where this is not a situation that lends itself to a compromise,” Vilsack said.
Mexico on Monday announced a new decree, effectively banning imports of GMO corn. Following the declaration, Mexico quickly softened it’s stance after facing backlash from the Biden administration.