The US escalates its claim that Mexico’s GMO corn ban violates the trade agreement.

The United States raised its concerns to Mexico’s restrictions on genetically modified corn imports, demanding a dispute resolution panel under the North American trade treaty, according to the office of the United States Trade Representative.

Formal negotiations failed to settle major disagreements between the two close trading partners over the use of genetically modified (GM) corn, which is mainly grown by US farmers.

Washington claims that Mexico’s decision prohibiting imports of genetically modified corn used in dough and tortillas for human consumption is not founded on science and breaches the country’s commitments under the U.S.-Mexico-Canada Trade Agreement, which was signed in 2020.

If the panel finds in favor of the United States and Mexico fails to comply with its directions, USTR might eventually win the right to put punitive tariffs on Mexican exports, triggering a rare North American trade war.

According to US Trade Representative Katherine Tai, the move is intended to enforce Mexico’s USMCA obligations to preserve science-based agricultural biotechnology laws.

As a result, Tai stated It is vital that Mexico repeal its anti-USMCA biotechnology policies so that American farmers may continue to access the Mexican market and use innovative technologies to address climate and food security problems.

Mexico now purchases around $5 billion in GM corn from the United States each year, mostly for livestock feed. It claims that transgenic corn affects natural kinds and may have negative health impacts, which the US side denies.

Corn futures on the Chicago Board of Trade briefly reversed gains following the USTR announcement, as traders worried that the dispute may jeopardize US exports to Mexico.

The panel request followed a request by US officials for 75 days of formal consultations in June. Mexico has requested US assistance in conducting cooperative scientific research on the health effects of genetically modified corn, but Mexican officials told Reuters that the proposal was declined.

“Mexico’s approach to biotechnology is not based on science and contradicts decades of evidence demonstrating its safety and the rigorous, science-based regulatory review system that ensures it poses no harm to human health and the environment,” U.S. Agriculture Secretary Tom Vilsack said in a statement.

He went on to say that advances in agricultural biotechnology to boost yields serve to alleviate global food and nutrition security, climate change, and food price inflation.

The USTR’s decision was applauded by US corn trade groups and US senators from both parties, who claimed Mexico’s policies were harming US farmers.

Republican Senator Deb Fischer of Nebraska said the move would “hold Mexico accountable and prevent its blatant trade violation under the USMCA.”

According to the USMCA’s dispute resolution procedures, a five-person panel must be constituted within 30 days, with a chair jointly appointed and the US side selecting two Mexican panelists and Mexico selecting two American panelists. The group will consider testimony and written submissions, and its initial report is due 150 days after the panel is established.

Previous USMCA dispute panels last year ruled in the U.S.’s favor in a dispute over Canadian dairy quotas, and against the U.S. on automotive rules of origin, siding with Mexico and Canada.

There have been other disagreements between the U.S. and Mexico, most notably over energy in which the U.S. has argued that Mexico’s nationalist policy prejudices foreign companies.

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