Mexico’s AMLO Government Refuses to Bow to US Sanction Threats, Ups Ante in Fight Over GM Corn

Washington is threatening to expand its sanctions regime to Mexico, its second largest trade partner, for wanting to protect its own native crop diversity as well as its citizens’ rapidly worsening health. 

Almost three decades after NAFTA was signed, Mexico has overtaken the United States as the world leader in childhood obesity. As diets rich in native corn and other traditional foods have been supplanted by ultra-processed foods and beverages, most of them coming from the US, Mexico is now in the grip of an alarming health crisis. This issue was already discussed in a VOXEU study cross-posted here in 2018, the findings of which indicated that “across Mexican states, a one standard deviation increase in the unhealthy share of food imports from the US increases the likelihood of individuals being obese by about 5 percentage points.”

According to that article adult obesity rates more than tripled in Mexico between 1980 and 2012, from 10% to 35%. Today, the rate is 37% today, the fifth highest in the world. Over 12% of the adult population has diabetes and a further 22% prediabetes. Almost half (47%) of adults have hypertension — the exact same proportion as the US.

Unless current trends are reversed, close to half (43%) of all children between the ages of 5 and 19 could be obese by 2030, according to forecasts by the Food Health Alliance. Mexico’s AMLO government is determined to step up to the plate (apologies) but it faces a wall of resistance from its biggest trading partner, the US, which provides 80% of Mexico’s food imports.

Mexico already enacted one of the strictest food labelling laws on the planet in 2020, much to the horror of global food and beverages companies. To them Mexico is a vital market, consuming more processed food than any other country in Latin America. The US, EU, Canada and Switzerland, home to some of the world’s biggest food companies, tried to derail the new legislation. But to no avail. The arrival of Covid-19, which is particularly lethal to people with three comorbidities — obesity, diabetes, and hypertension — strengthened the government’s case and resolve.

The AMLO government has also passed new legislation to ban trans fats from all processed foods, which will take effect in September. And it is trying to ban the consumption of GMO crops, albeit poquito a poquito. On December 31, 2020 Mexico’s President Andrés Manuel López Obrador (aka AMLO) issued a decree calling for all imports of GMO crops, including corn, as well as the “probably” carcinogenic weedkiller glyphosate to be phased out by the end of January 2024. Crucially, the decree enjoyed the support of Mexico’s Supreme Court.

But the decree terrified US farmers, particularly in the corn belt, Big Ag companies and global biotech behemoths, for good reason: More than 92% of the corn grown in the States is GMO, and Mexico, where corn was first domesticated around 9,000 years ago, is currently the biggest export market for US corn, all thanks to NAFTA. Its second biggest market, China, has been gradually reducing its corn imports from the US due to a combination of weak domestic demand, cheaper supplies from Brazil and the spectre of escalating tit-for-tat trade war with the US. Between them China and Mexico accounted for over half of all overseas purchases of US corn last year.

Faced with the threat of retaliatory measures from the US, AMLO’s government issued a new presidential decree earlier this year. It includes exemptions for feed corn, which counts for the lion’s share of U.S. exports. In its new decree the ban only applies to GM corn used in tortillas and corn-dough, which is supplied almost exclusively by Mexican producers of white and native corn varieties. The government reserved the right to substitute GM corn for animal feed some time in the future.

Only four percent of US corn exports are white corn, and most of that does not go into tortillas. In other words, the new decree will have minimal impact on US growers, at least for some years to come. Yet even that did not placate the US government.

At the beginning of this month, Washington convened a trade dispute panel, arguing that the new decree still violates the U.S.-Mexico Canada free trade agreement and is based on bad science. A week letter, the Canadian government joined the scrum arguing that Mexico could extend its GM ban to other crops. The panel of handsomely paid experts will now spend around half a year studying the complaint before releasing its findings, which could lead to the imposition of trade sanctions on Mexico if the country is deemed to have violated the USMCA trade agreement.

But if the US and Canada’s escalation of their trade dispute with Mexico was meant to break the Mexican government’s resolve, it appears to have had the opposite effect. Instead of bowing to the threats of trade sanctions, Mexico’s government has upped the ante. On Saturday, it imposed a 50% tariff on white corn imports with the apparent aim of boosting national production and preventing the entry of GM corn. Mexico imports relatively little white corn — the kind used for human consumption — and most of it comes from the US and South Africa, according to La Jornada.

“It may be that they take us to a panel, but this is a matter of public health,” AMLO said in his daily morning conference, adding that Washington has refused to jointly carry out an investigation with Mexican scientists to study the harm caused by the consumption of GM corn. “There are many interests involved,” he concluded.

AMLO’s decision to impose a tariff on imports of white corn comes after corn growers in the state of Sinaloa shut down the local airport in Culiacán for two days in protest against low international corn prices. The hope is that the import tariff will help staunch the downward price pressures for local growers. Mexico’s President has also said he will sign a decree preventing tortilla shops from buying GM corn:

“I am about to sign this week (an agreement) so that only white and non-transgenic corn is used in tortilla shops. This will be accompanied by the establishment of tariffs so that [GM corn] is not imported and purchased from Mexican producers ”

AMLO’s latest actions will presumably elicit yet more threats from Washington and Ottawa. But the stakes appear to be too high for Mexico’s government to back down at this point. At risk is not only the (already compromised) health of many Mexicans but also the country’s native maize varieties and ecosystems, which are invaluable not just for Mexico but for the world at large. As Timothy A Wise, a senior adviser at the Institute for Agriculture and Trade Policy, notes in a piece for Consortium News, the escalating food fight between the US, Canada and Mexico “may well test the extent to which a major exporter can use a trade agreement to force a sovereign nation to abandon measures it deems necessary to protect public health and the environment”:

As Mexico’s Economy Ministry noted in its short response [to the US governments’ convocation of a trade dispute panel), Mexico will show that its current measures have little impact on U.S. exporters, because Mexico is self-sufficient in white and native corn.

Any future substitution of non-GM corn will not involve trade restrictions but will come from Mexico’s investments in reducing import dependence by promoting increased domestic production of corn and other key staples.

The statement also noted that the U.S.-Mexico-Canada Agreement’s environment chapter obligates countries to protect biodiversity, and for Mexico, where corn was first domesticated and the diet and culture are so defined by it, corn biodiversity is a top priority.

As for the assertion that Mexico’s concerns about GM corn and glyphosate are not based on science, the U.S. Trade Representative Office’s action came on the heels of an unprecedented five weeks of public forums convened by Mexico’s national science agencies to assess the risks and dangers.

More than 50 Mexican and international experts presented evidence that justifies the precautionary measures taken by the government. (I summarized some of the evidence in an earlier article.)

But even if Mexico wins the dispute, the AMLO government will still have its work cut out. While a decline in white corn imports in 2022 suggests a certain amount of progress in reducing import-dependence, national-level data show few signs of a meaningful increase in corn production. As Wise notes, “with corn and wheat prices falling around 20% percent in recent weeks, the government is buying up around 40% of the harvest from small and medium-scale farmers at higher prices with the goal of giving larger producers the bargaining power to then demand higher prices from the large grain-buyers that dominate the tortilla industry.

AMLO also appears to be setting his sights on the oversized market power of Mexico’s food monopolies. In a speech last week he said:

There are still many monopolies. For example, the corn monopoly. Two companies control 90% of the corn industry. Ninety percent! Imagine that, in a country where corn is the basic food staple. Meat: three big [companies]. Fish: around five. Eggs: around 10. So we need to find a way to democratise all productive activity.

But the main problem right now is with yellow corn, which Mexico is hugely dependent upon for animal feed. And for the moment almost all of it comes from the US, in GM form. In fact, Mexico’s corn imports are forecast to climb to 18 million tonnes in the next marketing year, up 5% from the previous year, due to increased demand from the starch and animal feed sectors. That’s according to a Global Agricultural Service of the US Department of Agriculture.

To try to reverse this trend, Mexico’s government is studying the possibility of reaching agreements with farmers in Argentina and Brazil to procure imports of non-GM yellow corn while also trying to ramp up domestic production. To that end, scientists at the National Autonomous University of Mexico (UNAM) have developed three varieties of yellow corn — Kuautli Puma, Mistli Puma and Coztli Puma — as an option for growers in rain-fed or irrigation peak areas. Also, as previously reported here, some US farmers are also getting behind Mexico’s proposed GM ban.

But the outcome of this trade dispute will ultimately be decided by the supposedly independent judges on the dispute panel. And that outcome could have global repercussions. If the panel sides with the plaintiffs, as tends to happen in most of these cases, Mexico could face significant retaliatory sanctions should its government decide to proceed with its ban on GM corn for human consumption. The message will be clear to governments worldwide: think twice before adopting measures to protect public health and the environment, if those measures threaten in any way the economic interests of a major exporter with whom you have signed a free trade agreement.

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  1. lyman alpha blob

    What would happen if the US stopped subsidizing big agra to grow things people don’t really want rather than almost literally trying to shove it down people’s throats? How is this in any way a “free market” if countries are being made offers they can’t refuse?

    Also, do countries have any other recourse besides the ISDS? You’d think as crooked and pro-corporate as ISDS is, countries wouldn’t have to recognize its jurisdiction, much like countries who refuse to sign on to the ICC. Are countries sovereign or not?

  2. Chas

    Hooray for AMLO and Mexico. And perhaps this situation creates opportunity for those farmers in the USA who are still producing non-GMO corn. There is demand for their corn in Mexico and they could join together to fill the demand. Mexico could help other countries, such as Cuba, to get started growing traditional corn for the Mexican market.

  3. Eclair

    Probably the most evil part of using GM corn: the big Ag companies own your seed corn. You cannot dry and save and then use the seeds to plant your crop next year. You must buy new seed from the seed companies. They will sue you (effectively bankrupting you) if you plant GM seed corn from your previous year’s crop.

    In our own small version of the Three Sisters, we plant non-GMO heirloom corn varieties only. Nothstine Dent, planted a few years ago, was a big producer and we still have seed corn from that crop. This year, we are trying Bloody Butcher, also a dent corn (recommended by an NC commenter!)

    And, speaking of the multiple varieties of basic food stuffs developed and grown by Indigenous people, the Incas and other groups in what is now called Peru, staved off disease and catastrophic crop failure by growing over 3,000 varieties of potatoes! (As an aside, look what happened to the Irish when they settled on growing one variety of potato!) GM potatoes were approved by USDA in 2016.

    1. The Rev Kev

      I have read that if some of those GM seeds blow onto your place and start growing, that the GM companies will sue that person to punish them for not growing GM seeds. And of course the law backs those companies.

      1. thousand points of green

        Monsanto focused its GMO activity on wind pollinated crops in order to facilitate the contamination of everybody’s crops with windblown frankenpollen from their contracted frankenfarmers. They would then send spies throughout the relevant farmland areas tresspassing onto farmers’ land and taking samples without permission. If they found the slightest trace of detectable frankengene contamination in the targetted farmers’ relevant crops, they would pretend to believe it to be proof that the targeted farmers were growing these frankencrops ” without permission” and they would threaten to massively sue the targeted farmers unless the famers paid Monsanto a whole bunch of “settlement money”.

        Basically, Monsanto was running an extortion and shakedown racket all over farm country in addition to all the other things Monsanto was doing. Percy Schmeiser would not submit to shakedown and would not pay the extortion money to Monsanto.

  4. Cristobal

    The things AMLO is doing are truly inspiring. He, and his government, are actually looking for solutions for problems and implementing them. Could the ¨free trade¨ lawfare he is facing eventually lead to something like an agricultural Brexit from the so-called free trade regimes? Mexico is certainly not the only country in which farmers and the public are being abused by their governments (or¨economic unions¨)? Protecting a country´s agriculture and industry from imports from countries with less strict environmental, health and labor standards is one of the basic functions of a sovereign state. It is becoming more clear every day that this kind of situation is not a bug, but a feature of the so-called free trade agreements.

    1. Susan the other

      Yes this is good news and I hope AMLO succeeds. Free trade agreements need to be modified with obligations. The obligations needed are those that sovereign countries decide are important and necessary for the health and well being of their societies and environments. Free trade further needs to be sanctioned against destructive competition because now that the entire world is sufficiently industrialized to produce everything a sovereign country needs, that vicious competition, set in stone by a dreadful trade treaty, is not just a sovereignty killer but a planet killer. The environment can’t take all that profiteering. The US should back off and let Mexico handle the corn trade.

      1. some guy

        Making Free Trade agreements ” modified” with “obligations” is like making powdered Uranium 235
        ” less radioactive” by mixing some lead into it. No amount of “modification” with “obligation” will make Free Trade anything other than part of the pre-shaped forcefield and matrix for the Corporate Globalonial Plantation.

        The only viable-survival response to Free Trade is Abolition.

        Free Trade is the New Slavery.
        Sovereign Protectionism is the New Abolition.

      2. hunkerdown

        No, imaginary friends should not be making obligations with imaginary friends and forcing real people to perform them.

  5. GDmofo

    “I am about to sign this week (an agreement) so that only white and non-transgenic”… not the greatest choice of words for a quote, just saying. Maybe if was Duda saying it…

    Just wondering, what exactly would the US sanctions on Mexico over this look like? Tit-for-tat food tartiffs?

  6. JonnyJames

    This is good news for a change, but the last paragraph contains the caveat: “…If the panel sides with the plaintiffs, as tends to happen in most of these cases, Mexico could face significant retaliatory sanctions should its government decide to proceed with its ban on GM corn for human consumption…”

    The previous comments have the issue covered. It is encouraging that AMLO and the Mexican govt. are willing to stand up to the imperial overlords to the north.

    Would Mexico be able to withstand retaliation, and “sanctions” if the decision is against them and they do not comply?

    If Mexico does rebel, would other countries be emboldened and follow suit?

    In light of the larger context of the proxy war in Ukraine, US (and UK) lawlessness, de-dollarization etc. this could be a watershed event. We shall see

    1. Rubicon

      A great article, and a wonderful group of respondents who understand the immense fight ALMO, China/Others are making against the World’s Greatest Evil: the US Financial hegemon.

  7. Societal Illusions

    Yay “free” markets… our protectionism and subsidies are better than yours. go Mexico! inspiring Eclair and good questions Cristobal and Lymen alpha blob.

  8. The Rev Kev

    Since about 30%of the countries in the world are being sanctioned, it was only a matter of time until Mexico was as well. If Mexico can reset the clock before NAFTA came in, they have a very good chance of securing a future for themselves. Of course Washington will fight this but you can bet that countries like China will be more than happy to step in and create new markets for themselves here. At that point, I would expect Lindsey Graham to step forward to propose that Congress pass a law whereas Mexico is not allowed to trade with China but that is Lindsey Graham. After reading this post, I can only conclude that Mexico feels that they must fight this fight as it has become existential to them to break out f the present peonage or else the country will not have a future worth talking about. Seeing the US destroy the economy of their close ally in the EU must have convinced them that they will do the same for Mexico as well.

  9. Insouciant Iowan

    I wonder if China’s growing investment in Mexico (Why Chinese Companies Are Investing Billions in Mexico may come to include increased purchases of Mexican corn in preference to US GMO.
    Central American countries under CAFTA suffer some of the same strictures as Mexico. Consequences were obvious in 2014.
    “Under CAFTA, family farmers in El Salvador, Guatemala and Honduras have not fared well, the economies have become dependent on short-lived apparel assembly jobs – many of which have vanished, and economic growth has actually slowed. . . .. Under CAFTA, family farmers in Honduras, El Salvador, and Guatemala have been similarly inundated with subsidized agricultural imports – mainly grains – from U.S. agribusinesses. Agricultural imports from the United States in those three CAFTA countries have risen 78 percent since the deal went into effect. While these exports represent a small fraction of the business of U.S. agricultural firms, they represent a big threat to the Central American family farmers who do not have the subsidies, technology, and land to compete with the influx of grain.” []
    A friend in El Salvador has pointed out growing Chinese investment there. Corn is one of ES’s largest production areas.

  10. spud

    only way out and to restore civil society, is crush free trade for good. restore sovereignty, and as amlo is showing, democratic control.

    along the way you can demonize or even jail the free traders.

    then you can take on the oligarchs, monopolies and finance.

    “Human rights campaigns have traditionally focused on negative rights–that is, the protection of people from repression and persecution. I believe that it is time we also campaign against individuals and institutions that violate the people’s positive rights. Neoliberal policies such as those that have been imposed by the World Bank and International Monetary Fund, institutionalized in the Philippine political economy, and rationalized by a succession of economic managers and economists have created massive poverty and inequality that have prevented millions of our fellow Filipinos over the last five decades from their full development as human beings because they have destroyed, disarticulated, and disintegrated the country’s base of physical survival, that is, the economy. That is a crime.

    Neoliberal policies are now discredited. The Washington Consensus is in the junk heap. No self-respecting economic manager, except perhaps in the Philippines, any longer invokes the “magic of the market” or the so-called benefits of free trade. Yet in so many countries, and not just in the Philippines, neoliberal policies continue to be the default mode, like the proverbial dead hand of the engineer on the throttle of a speeding train. They continue to inflict severe damage on the life chances of billions of people because they have been institutionalized.”

    “It is high time we seek justice for economic crimes. It is high time we cease honoring such criminals with Nobel Prizes in Economics but bring them instead to the ICC. If the arraignment of such economic criminals cannot immediately be done owing to the need to amend the Rome statute, then let us at least establish a “Hall of Infamy” where we can enshrine such dead and living stars of neoliberalism as the Nobel Prize laureate Milton Friedman, the ideological soulmate of the General Augusto Pinochet; Michel Camdessus and Christine Legarde, the best known faces of IMF-imposed austerity; former World Bank President Robert McNamara, who conspired with the dictator Marcos to make the Philippines one of the guinea pigs of structural adjustment; and Pascal Lamy and Mike Moore, who spearheaded the drive to imprison the global South in the iron cage of free trade, the World Trade Organization.”

    “And, of course, one must not forget Cielito Habito, who as National Economic Development Authority chief almost singlehandedly wiped out Philippine manufacturing with his push to bring down average tariffs to 4-6 percent simply to prove that Filipinos could take economic pain better than Pinochet’s Chicago Boys in Chile, who did not allow tariffs to go below 11 percent. Nor must we overlook the WTO-USAID mercenary Ramon Clarete, who famously sought to sugarcoat the impending murder of our agricultural sector by claiming that Philippines’ joining the WTO’s Agreement on Agriculture would result in 500,000 new jobs every year in the countryside!”

  11. Adam Eran

    One relevant bit of information: One might guess that shipping a bunch of subsidized Iowa corn to Mexico would impair corn farmers’ income–and NAFTA itself acknowledged that with a bailout for the big farmers–but the little farmers got no bailout. In the wake of NAFTA, Mexican median, real income declined 34% (says Ravi Batra in Greenspan’s Fraud). That’s Great Depression levels of decline…so economic refugees–Mexican Okies!–flocked north, along with the political in military refugees from Gringolandia’s attacks on its southern neighbors. Between 1798 and 1994, the U.S. is responsible for 41 changes of government south of its borders.

    Of course the sensible remedy is to punish the victims…NOT!

    1. some guy

      Driving millions of Mexican farmers and others off the land and out of the small towns and villages was part of the deliberate purpose of NAFTA. The happy legend was that a 1,500 mile long strip of maquiladoras would be built all along the border from the Pacific to the Gulfa Mexico. A Big Beautiful Wall of factories.

      But Clinton conspired to get China into the WTO and get MFN Status for China at the same time, and a lot of the “expected” maquiladoras were built in China instead. So without the Big Beautiful Wall of maquiladoras along the entire border, the NAFTAstinian refugees kept coming northward.

  12. thousand points of green

    Southern Mexico ( Valley of Mexico and adjacent areas) is an example of what is called a Vavilov Center of Crop Diversity, named after Vavilov who first posited the existence of such centers and worked out where they were.
    and . . .

    Corn was moved out of ” Lower North America” ( Mexico) into Middle North America ( present day US) and Upper North America ( present day Canada) at least a couple of thousand years ago. The Indian Nations in Middle and Upper North America were developing their own selections and refinements of corn for at least that long, and developed many varieties specifically suited to their own needs and desires and suited to growing conditions very different than any existing in Mexico. Mid-Upper North America is not a Vavilov Center of Diversity the way that Southern Mexico is, but it has enough diffuse and spread out corn-type diversity that it could be considered a secondary zone of corn diversity in its own right. One hopes somebody would eventually develop the language to be able to convey that fact and that concept.

    Many obscure to midsize seed companies keep some of these Middle-to-Upper North American corn types alive and available to wannabe seed buyers/growers. Just one such company ( out of many) is called Sand Hill Preservation Center.
    Here is their listing of what corn types they are selling for the 2023 season. ( Some may be already sold out). As one can see, there is a lot of diversity here, much of it different diversity than the diversity in Mexico. So the legacy US and Canada zone corn-diversity is also worth saving in its own right from the frankengene contaminators and polluters. Here is the link to Sand Hill Preservation’s corn types.

    And this is just one among many companies laboring in obscure little corners of the commercial landscape to keep these corns alive.

    ( I have been growing for about 13 years a kind of corn called Hickory Cane which I got from some farmers who were themselves immigrants from Appalachia. I figured that if they were already growing it in Michigan, that they had made a start in getting this more Southern corn to be Michigan adapted, and I could continue the work in my own amateur way. I believe that Hickory Cane and other Southern Dent Corns are descended from corn-types specifically brought up from Mexico some-to-several centuries ago along Indian trade routes. I sometimes observe on the aerial prop roots of some of my Hickory Cane corn plants little traces of the same kind of mucilage which a certain Oaxaca mountain village corn has been found to produce large amounts of. I would hope that other growers of Southern Dent Corns would look at the early-emerging prop roots on their corn plants to see if some of their plants are also producing traces of this prop-root-primordia mucilage. Perhaps it is something that could be selected for among the Southern Dent Corns that we already have. Here are a couple of catalog offerings of Hickory Cane corn.)

    And here is a reference to ” Hickory Cane Corn” being grown in the Arkansas Ozarks. This “Hickory Cane” is yellow whereas I had/have always heard of Hickory Cane being a white corn. But maybe this corn is also Hickory Cane in every way except for the kernels being yellow as against white.

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