Genetically modified (GM) crops remain a contentious issue not only in India but also across the globe. Irrespective of the advantages or disadvantages of GM technology, the rules governing the international trade in these products have been proactively discussed and negotiated in various regional trade agreements (RTA) across the world.
Thousands of kilometers from India, trade in GM products has become a bone of contention between Mexico and the US. The reasons behind the trade tension and its linkage with US-Mexico-Canada (USMCA) trade agreement merits a discussion in the context of a wider debate on GM products.
In 2020, Mexican President Andres issued a decree to prohibit GM corn in Mexico by 2024. The decree prohibits GM corn based on environmental and health risks, achieving self-sufficiency and food sovereignty, and cultural appropriateness. Additionally, the use of glyphosate, a herbicide used heavily in GM corn production, was also prohibited.
Notably, the domestic cultivation of GM corn was not allowed in Mexico even before this decree. In 2013, the Mexican Supreme Court suspended the domestic cultivation of GM corn to preserve its traditional corn varieties. In contrast, the imports of GM corn were permissible in Mexico.
Corn is a staple crop in Mexico, where white and yellow corn is mainly used for human and livestock consumption respectively. Mexico is the second largest importer of corn and is increasingly dependent on imports to meet its domestic requirements. In 2021, Mexico imported 17.5 million tonnes which accounted for 39.9 per cent of domestic corn consumption, whereas it was 17 per cent in 2001. Importantly, more than 95 per cent of Mexico’s total corn imports are sourced from the US.
Once the decree is enforced, it would restrict the imports of GM corn posing serious implications for the US.
Mexico-US trade friction
This ban would adversely affect the trade interest and farm income of the US. Firstly, GM corn is highly prevalent in the US, accounting for more than 90 per cent of its domestic production. Secondly, it would negatively impact 25 per cent of the global export of corn by the US.
Thirdly, a study by ‘World Perspective’ forecasted that the ban would shrink the GDP by $30 billion over 10 years and would result in the loss of 32,000 jobs annually in the US, besides negatively impacting corn prices.
Fourthly, the concerns of the farmers were further compounded by Mexico’s ban on glyphosate which is widely used in the US for GM corn production. Citing WHO warnings, Mexico stated that glyphosate harms human health and the environment and is a probable carcinogen causing cancer.
The National Corn Growers Association, representing US farmers, claimed that the decree is arbitrary and not based on scientific evidence. The Association urged the US government to invoke the dispute settlement provisions of USMCA to shield the interests of corn producers.
As the US threatens to initiate a trade dispute, both countries are engaged in regular talks to diffuse the trade tension amicably.
The USMCA is an RTA between the US, Mexico, and Canada which was enforced in 2020. The agreement contains detailed provisions on Sanitary and Phytosanitary (SPS) measures, and biotechnology such as risk assessments and detailed procedural requirements in the garb of transparency, which aims to reduce trade disruptions and provide uninterrupted market access in the importing country.
By citing the USMCA provisions, the US claims that Mexico’s ban on GM corn has no scientific basis and violates its commitments. On the other hand, Mexico argues that the ban is a precautionary measure to protect health and the environment, and it is not mandatory to allow the import of GM products under the USMCA. Additionally, Mexico documented various studies highlighting the adverse impact of GM corn.
These intense negotiations resulted in a revised decree issued by Mexico in 2023 which exempts GM corn for livestock consumption and industrial use from import ban.
It was a big relief for the US farmers as nearly 90 per cent of Mexico’s imports consist of yellow corn which is predominantly used for non-human consumption.
Mexico’s efforts, nevertheless, did not satisfy the US, which continues to oppose the import restriction on GM corn for human consumption and the use of glyphosate. To exert pressure on Mexico, the US initiated dispute settlement proceedings under the USMCA provisions.
The simmering dispute provides valuable insights for developing countries while negotiating trade rules governing GM products.
Despite a long-standing domestic ban on GM corn cultivation and related concerns, Mexico negotiated trade rules on GM products. Often, developing countries are under pressure to accommodate the interests of developed countries in trade agreements. This necessitates assessing its interests comprehensively, failure to do so can curtail its policy space, a problem confronted by Mexico.
Mexico argues that the USMCA provides enough flexibility to restrict imports of GM products on a precautionary basis to protect public health and the environment. Contrarily, the US insists on scientific evidence and risk assessment, thus diluting Mexico’s right to take precautionary measures. Different scientific evidence may have different conclusions due to the lack of global consensus on the safety of GM products.
Furthermore, it is a big challenge to produce timely scientific evidence without adequate scientific and administrative capacity.
To prevent future pressure from varying interpretations, developing countries must focus on legal certainty and textual clarity to protect their policy space.
Currently, the issue of GM has garnered considerable attention in discussions under sustainable food systems at the WTO, requiring a cautious and informed negotiating approach. Overall, developing countries need to put their house in order before negotiating on sensitive issues rather than repenting at a later stage.
The writers work at the Centre for WTO Studies, IIFT. Views are personal