What would a ban on genetically modified corn mean for trade between the U.S. and Mexico?

The Mexican government is considering a ban on genetically modified corn entering the country, which would result in big losses for U.S. corn producers.

By Michael Marks and Glorie MartinezDecember 20, 2022 10:15 am, ,

Mexico is one of the world’s biggest importers of corn. Last year, more than $5 billion worth of foreign corn came into Mexico, most of it grown in the United States. But that could change.

Mexican officials are considering banning genetically modified corn from entering the country, as well as any corn that’s been sprayed with certain pesticides. That policy would result in big losses for U.S. corn producers.

For more on just how big, the Standard was joined by Diego Marroquín, an expert on trade between the U.S. and Mexico. Listen to the story above or read the transcript below.

This transcript has been edited lightly for clarity: 

Texas Standard: How big of an impact would this policy have on American corn growers? 

Diego Marroquín: It will be huge. Mexico is the largest importer of corn in the world, and 92% of that corn comes from the U.S. Approximately 50,000 U.S. jobs depend on corn exports. So, banning the import of corn would have a very negative effect, both for the U.S. in terms of job creation and for Mexico in terms of food security.

What impact would there be in Mexico, if there’s such reliance on corn imports from the U.S.? Where’s Mexico going to get corn now, and what does this mean for food security there? 

In the case of Mexico, the cost of corn would go up by 19%. Keep in mind that this corn is used for feed. So, it would have a really big effect in terms of inflation for products like beef, chicken. Those goods will go up. And we’re talking about a country where inflation hasn’t gone down in a long time. 

So, ripple effects for both economies. Where is the push coming from for this change?

The real problem is that Mexico has not issued any biotech food imports since 2018, when President López Obrador started his presidency. This is not a decision based on scientific principles or international standards. It really stems from AMLO’s rigid ideological stance on biotech. 

Corn is a key feature in the construction of the Mexican national identity. But the reality is that you need those imports and Mexico needs the U.S. to put food on the table. Otherwise, costs are going to be huge. This is even more important than the energy dispute because it works as a litmus test for the Mexican government and whether they really want to comply with USMCA, the trade agreement between the U.S., Mexico and Canada. 

Representatives from Mexico and the U.S. are trying to negotiate a compromise. Is there one in the wings, and what might it look like?

Last week we had a big delegation from the Mexican government — Secretary Ebrard from Foreign Affairs, Secretary Villalobos from Agriculture, the Secretary of Economy, the environment and the health regulator—they visited their counterparts in the U.S. I think there’s a huge disconnect here between the narrative from the president and the efforts to find a solution to this problem. 

Secretary Tom Vilsack from the U.S. visits Mexico, and whenever there’s an issue, they discuss the issue. They agreed to something in private. And then President López Obrador goes out every morning during his morning conferences and he would say something to the contrary. So, it’s been very difficult for the U.S. government to trust what the Mexican government is going to do about this. They’ve been talking about this issue for about a month or so, and they haven’t found any solutions. 

Are there broader conclusions that can be drawn from this episode about changing trade dynamics between the U.S. and Mexico? 

Yes. So, this trade relationship is the most important trade relationship the U.S. has. Mexico is the top export market for the U.S. This represents, as I said, a litmus test for the Mexican government and whether they want to comply with the USMCA because their narrative is that they are friends, they are allies, they are each other’s top trading partners. But there’s the reality that there’s issues that both parties need to address. Mexico needs U.S. farmers to put food on the table, and U.S. farmers need the Mexican market to make a living. 

As you see it, a lot of this comes down to AMLO’s personal politics.

Yes. I think it’s pure ideology. This decision is violating USMCA Chapter 2 on market access and Chapter 9 on sanitary measures. As I said, time is very important here. The window of opportunity to bridge this gap and find a solution is closing fast. President López Obrador, President Biden and Prime Minister Trudeau are meeting in Mexico City in January. Ideally, we want to have a solution before that meeting so that they can talk about other important issues.

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