US Moves to Full Blown Trade Dispute with Mexico Over GMO Decree

The Office of the U.S. trade representative (USTR) announced on Friday it has requested dispute settlement consultations with Mexico under the U.S.-Mexico-Canada Agreement (USMCA).

Mexico continues to argue its recent decree that bans imports of genetically modified (GMO) corn for food use does not violate its trade commitments.

Mexico's Ag Minister Victor Villalobos says the issue is not suitable for the USMCA dispute resolution process. USTR, however, would rather let a formal panel decide.

Related story: Which States Would Feel the Effects of Mexico’s GMO Corn Ban?

“We fundamentally disagree with the position Mexico has taken on the issue of biotechnology, which has been proven to be safe for decades,” said Tom Vilsack, USDA secretary. “Through this action, we are exercising our rights under USMCA while supporting innovation, nutrition security, sustainability and the mutual success of our farmers and producers.” 

Background on Mexico's GMO Decree

Mexican President Andrés Manuel López Obrador declared in 2020 that Mexico will be phasing out imports of certain ag biotechnology products, including GMO corn, in 2025. 

After being approached by the U.S. in January about the trade issue, Mexico replied with a new decree, which proposed the ban be put in immediate effect, as opposed to the initial 2025 proposal. 

How the USMCA Dispute Process Works

Initially, the U.S. tried to forego a dispute with Mexico through negotiations. Because one-on-one conversations have not remedied the issue, the U.S. began the formal process of a dispute, which includes:

1.    Consultations

According to Congress, technical consultations are the initial step in invoking a dispute. USTR took this step in March, which required the U.S. and Mexico to meet within 30 days.  

2.    Establishing a Dispute Panel

This is the step USTR announced they are taking on Friday. At this point, the issue becomes a full-blown trade dispute, and a process will take place to put three to five people on a panel from both Mexico and the U.S. 

3.    The Panel Process

The elected panel will examine evidence and hear oral testimony from both Mexico and the U.S. 

4.    Resolving the Dispute

Once the panel delivers a verdict, the party that is found to have violated its obligations under the USMCA will have 45-days to settle the dispute. If a settlement isn't reached in that window, the "winning" party can impose tariffs on the ag products, such as GMO corn.

Related story: Mexico Says U.S. GMO Corn Will be Imported if it Passes a Test

According to USTR’s press release, if the panel were to rule in favor of Mexico, it would stifle American ag exports and innovation.

“The USCMA spells it out very clearly; Mexico can’t say, ‘We’re banning yellow corn for human consumption, but it’s OK for livestock feed,’” says Chip Flory, AgriTalk host. “That’s not how these agreements work, and the U.S. has to enforce these agreements as they are intended.”