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SPS Consultations Over GMO Policies to Begin With Mexico

The U.S. government, dissatisfied with the narrowing of a Mexican ban on genetically modified corn (see 2302150026), has asked for technical consultations under the USMCA's sanitary and phytosanitary (SPS) chapter. A formal dispute can't be initiated without first taking this step.

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In a background call with reporters, officials from the Office of the U.S. Trade Representative said the consultations are due to three issues -- Mexico's decision to ban GMO corn that would be used to make tortillas; its intention to "gradually substitute genetically engineered corn for use for animal consumption and for human consumption other than tortillas"; and its rejection of a number of other products that involved biotechnology. The official declined to further describe the rejections, but said all the products were approved in the U.S., and said they underwent "rigorous food safety evaluation before entering the market."

The technical consultations must begin within 30 days, but there is no upper limit on how long they can go on before a dispute is triggered. "In other words, if they are being productive, and the parties want to continue to engage … they are free to do so," a USTR official said. He said the administration hopes to produce a good outcome from the negotiations, which he said would be a "deeper exchange" than the months of dialogue so far. In addition to numerous meetings of political appointees, there has already been technical work done through the trade pact's SPS Committee and Biotech Working Group.

Before those talks, Mexico had intended to ban the import of all GMO corn in a few years. The vast majority of U.S. corn exports are yellow corn, and a large portion of that volume is for animal feed. With the softening of the decree, those imports no longer have a date that they will have to stop.

But even though the narrowed ban doesn't affect as much trade, a USTR official said: "Our stakeholders really have expressed their strong dissatisfaction with Mexico's policies and also their concern with Mexico diverting away from science and risk-based approach to regulation. This issue really gets to the heart of the SPS chapter in the USMCA. Mexico’s policies really put a lot of uncertainty into our bilateral trade."

A USTR lawyer on the call, in response to our question about what leverage the U.S. could have in a dispute if not much trade is affected, declined to speculate on hypotheticals.

In a March 6 press release announcing the consultations request, the administration emphasized it wants an outcome "that respects each country’s sovereignty and benefits the United States, Mexico, and our agricultural producers and stakeholders."

Agriculture Secretary Tom Vilsack said in the release: “While we appreciate the sustained, active engagement with our Mexican counterparts at all levels of government, we remain firm in our view that Mexico’s current biotechnology trajectory is not grounded in science, which is the foundation of USMCA.”

USTR Katherine Tai said: "Mexico’s policies threaten to disrupt billions of dollars in agricultural trade and they will stifle the innovation that is necessary to tackle the climate crisis and food security challenges if left unaddressed."

House Ways and Means Committee Trade Subcommittee Chairman Rep. Adrian Smith, R-Neb., issued a statement after the announcement that said: "While this is welcome news, it should have happened sooner. Nonetheless, this is an important step toward formal dispute consultations, and I appreciate Ambassador Tai’s attention to this matter.” Ways and Means Chairman Jason Smith, R-Mo., called it a critical step, and said that the Biden administration had not been doing enough to challenge the Mexican policy until Republicans took the majority in the House of Representatives.

Senate Finance Committee Chairman Ron Wyden, D-Ore., said farmers "need the United States to show it’s serious about enforcing our trade deals. Today, USTR has finally taken a major step towards enforcing those [agriculture] commitments and ensuring that Mexico will employ science-based ag regulations that open markets for American corn and other products."

The Mexican government said that the U.S. request isn’t contentious, just a step taken to find a cooperative solution. It also defended the decree on white corn for tortillas as one that protects Mexican corn biodiversity, and said it will use these consultations to show that the decree on white corn has no commercial impact, and therefore is not violating the treaty.