As Mexico’s GMO ban looms ever larger, the US National Corn Growers Association is calling for the U.S. Trade Representative to intervene, “before it is too late”.
Thanks to NAFTA and US agricultural subsidies, Mexico has become a major importer of US-produced staples such as corn, rice and beans. In 2021, the country, once the birthplace of modern maize, became the world’s second largest importer of corn. Mexico’s President Andrés Manuel Lopéz Obrador (or AMLO as he’s commonly known) is determined to reverse this trend. Since coming into office in late 2018, AMLO has made food security and self-sufficiency one of the main priorities of his government.
“We have to aim for self sufficiency in food, just as we have done with energy,” said AMLO in his regular morning press conference this Wednesday. “Producing what we consume in Mexico is the best strategy for tackling the problem of inflation.”
US Biotech Corn’s No.1 Export Market
These words were deemed so important by the Mexican government that it shared them on its official twitter account. But they will not have gone down quite so well among corn growers and Big Ag corporations on the other side of the Rio Grande. Nor will the recent announcement that Mexico plans to cut the cost of 24 basic goods by curbing food exports, including white corn and beans, in a big to tackle raging food inflation.
All the while the Jan 31, 2024 deadline for the Mexican government’s ban on all imports of the “probably” carcinogenic weedkiller glyphosate and prohibition of the cultivation and importation of genetically modified (GM) foodstuffs looms ever larger. For US corn farmers and Big Ag corps, the threat could not be greater: 90% of the yellow corn they produce is genetically modified, and Mexico represents 25% of their entire export market.
On Wednesday (Nov. 9,) the Wall Street Journal published a three-paragraph letter from Jon Doggett, the CEO of the US National Corn Growers Association, calling on Washington to “halt Mexico’s trade war before it’s too late”:
The US is a leading corn supplier for Mexico, and 90% of corn grown in this country is biotech, which empowers farmers to conserve the soil and reduce insecticide use. Given these facts, it goes without saying that Mr López’s decree would be devastating for the Mexican people and U.S. farmers. Thousands of growers are busy right now booking seed for spring 2021 planing, meaning that what is purchased this fall be in grain channels as late as 2025. Much of that seed is and will continue to be biotech corn.
Biotech corn isn’t the only crop targeted by Mexican officials. Biotech soybeans, cotton and canola import approvals have also been rejected by Mexico’s regulatory agency over the past year.
And here comes the kicker:
There is a way to resolve this situation before it is too late. The U.S. Trade Representative must intervene and file a dispute with Mexico under the U.S.-Mexico-Canada Agreement. Given all that is at stake, we would encourage USTR to act sooner rather than later.
A Decade-Long Struggle for Control of Mexican Corn
The world’s GMO giants have been trying to crack the Mexican market for a long time. But in 2013, a judge by the name of Manuel Zaleta ruled in favor of a motion brought by a grassroots coalition seeking to safeguard Mexico’s diversity and common ownership of corn. In doing so, Zelata suspended the granting of licenses for GMO field trials sought by Monsanto, Syngenta, Dow, Pionner-Dupont and Mexico’s Environment and Natural Resources Ministry. Since then the cultivation of GM corn in Mexico, even in field trials, has been banned.
In his ruling Zaleta cited the potential risks GMOs posed to more than 7,000 years of indigenous maize cultivation in Mexico, which has given rise to a staggeringly rich biodiversity. That biodiversity is vitally important not just for Mexico but for the world as a whole, as argued a 2018 article in Scientific American:
Commercial corn farmers in Mexico planted around 3.2 million acres during the rainy season; the rest—more than 11.5 million acres—was planted by campesinos, the researchers reported in August in Proceedings of the Royal Society. Using previous estimates, [the research team was] able to calculate that in 2010 alone family farmers in Mexico grew approximately 138 billion genetically different maize plants. The domestication of native maize across a wide range of temperatures, altitudes and slopes has allowed rare mutations to take hold that would otherwise disappear, Bellon notes. “Campesinos are generating an evolutionary service that is essential for them, for the country and, given the global importance of maize, for the world,” he says.
Scientists say this type of farming, fueled by traditional practices such as saving or sharing seeds from one season to the next, has resulted in Mexico’s 59 native maize varieties: a cornucopia of husks and cobs of all sizes and colors, from deep purple to creamy-white to pink to glowing orange. This diversity is rarely seen in the U.S.—the world’s largest producer of corn. “You go to a farm in Iowa and there may be three million plants, but they’re all genetically identical,” says Jeffrey Ross-Ibarra, a plant geneticist who studies the evolutionary genomics of maize at the University of California, Davis, and did not participate in the research. Because American farmers buy their seeds instead of cultivating their own, “there’s no chance for evolution to do its thing,” he adds.
Another Trade Dispute?
Mexico is already largely self-sufficient in its production of white corn, which is largely used for direct human consumption, and beans. But it depends on the US for 75% of its yellow corn, which is almost exclusively used to feed stock.
But according to Mexico’s deputy minister of agriculture, Victor Suarez, the country is ready to halve its imports of US-produced yellow corn by the time the GMO ban comes into effect, on Jan 31 2024, and is considering negotiating direct agreements with US farmers to ensure the corn imported is non-transgenic. If true, it confirms Doggett’s worst fears that US corporate interests are indeed under threat.
The US is already locked in a trade dispute with Mexico over the AMLO government’s energy policies, which are primarily geared at bolstering Mexico’s energy security. Now, the US is considering opening another one, this time over Mexico’s agricultural policies.
Last Friday, the US Trade Representative, Katherine Tai, held her first (virtual) meeting with Mexico’s newly appointed Economy Minister Raquel Buenrostro. In her previous role as head of Mexico’s SAT tax authority, Buenrostro spearheaded the AMLO government’s crackdown on decades-old corporate tax dodging, causing uproar among Mexican business lobbies, the American Bar Association and ambassadors from the US, Canada and Europe.
Now, Buenrostro is heading Mexico’s Economy Ministry. After her first meeting with Tai, the US Trade Representative Office reported that Tai had “underlined the importance of making expeditious progress in addressing the issues in Mexico’s energy sector”. She also “highlighted the importance of avoiding a disruption in U.S. corn exports and returning to a science- and risk-based regulatory approval process for all agricultural biotechnology products in Mexico.”
In other words, Mexico’s government needs to quickly abandon its quest for energy security and food safety and self-sufficiency. If it doesn’t, US exports of GM corn to Mexico could suffer disrupted, which could have devastating effects on food inflation in Mexico.
This not-too-subtle threat from the world’s declining hegemony, which happens to be Mexico’s largest trading partner, needs to be taken seriously. The US has shown all too clearly that it is willing to use economic reprisals against any country that threatens its financial interests. And few countries are as dependent on the US economy as Mexico, to which it is more or less joined at the hip.
The US accounts for a staggering 86% of all purchases of Mexican exports. And trade between the two countries has been on the rise in recent years. The ever-growing remittance payments that flow from Mexican migrant workers living in the US to their families back in Mexico are also a vital life-line for Mexico’s economy.
In other words, if it wanted to, the US could inflict crippling economic pain on its southern neighbor. If the consultation process over AMLO’s energy policies does not produce a resolution and the US then wins the subsequent international arbitration process, which it invariably tends to, Mexico could end up facing the imposition of potentially tens of billions of dollars of duties on some of its key export industries.
But any falloff in trade between the US and Mexico, which is also currently the US’s largest trading partner, would also hurt the US. The US is already facing a stagflationary recession and it desperately needs as much oil as it can get its hands on, including from Mexico. It is also rapidly losing influence in Latin America, whose six largest economies are, for the first time ever, being governed by left-wing coalitions. Some of those governments, including AMLO’s, are determined to chart a more independent course. Just as important, the US faces the prospect of souring relations with the EU over its Inflation Reduction Act.
Mexico is also an integral cog in the US’ near-shoring plans. In a speech to Mexico’s Senate this week, Buenrostro said that more than 400 North American companies have shown an interest in relocating some or all of their operations from Asia to Mexico.
Despite the growing threats from Washington, AMLO’s government remains unbowed, at least publicly, in its commitment to energy and food security. The Energy Secretary Rocio Nahle García recently stated that Mexico’s energy balance and policy are “issues of national security.” In light of today’s global energy crisis, the government’s decision to protect Mexico’s state-owned energy companies, Pemex and the Federal Electricity Commission (FCE), while pouring billions of dollars into expanding Mexico’s refining capacity and upgrading existing refineries has proven to be astute.
Now, AMLO plans to do the same with food. In his speech on Wednesday, in response to allegations that a US Republican Senator had threatened Mexico with legal consequences if it does not continue buying yellow corn from the US, AMLO seemed unperturbed:
“There is now a supposed threat, whose veracity we will have to confirm, from a Republican senator who stated that if we do not buy yellow corn, Mexico would be sued or that the law on transgenics would be reviewed. Well, with all due respect, they cannot do that, for we are a free, sovereign country…
As corn, this sacred of all plants, is native to Mexico, we have to take care of the native varieties and not just think about profitability. In addition, there is a growing trend right now toward broader consumption of white and native corn, which we are going to promote. I have heard that high-end restaurants, which I must clarify I don’t go to, are serving tortilla made from native corn, for which they charge a fair price.”
The truth is that the tortilla is an exceptional, extraordinary food stuff. Just take the taco: It has corn, which is a carbohydrate; meat, which is a protein; and the sauce, which is a source of vitamins. It is the most balanced thing there can be.
We have to look after that, take care of what is ours. Just think about how many varieties of corn there are and how many types of food are made with that corn.
Mexico is already largely self-sufficient once again in its production of both white corn and beans. But it is dependent on US imports for a whopping 75% of the yellow corn it consumes, almost all of which is GMO. This year, it is on track to import more than ever.
In other words, much remains to be done if Mexico is to be ready to sever its dependence on US supplies of GMO corn by the end of January 2024. The government will need to find alternative global suppliers. To that end, it is looking further afield to countries that produce and export non-GMO corn, including Argentina and Brazil. But it also needs to ensure that its support of Mexican producers, in particular small-scale farmers, translates into swift, significant, sustainable production increases. But before all that happens, it could face the mother of all legal blowbacks from Washington.