It’s been two years since a decree by Mexican president Andres Manuel Lopez Obrador to phase out imports of corn grown from genetically modified seed.
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In January 2021, the Obrador government followed through on its pledge to ban the import of GM corn hybrids for human consumption, and the use of glyphosate, by 2024. The implications included an estimated $4.4 billion in added import costs by the end of 2023 and greater food insecurity for Mexican consumers.
Why it matters: There is concern that the GM corn dispute between Mexico and the U.S. could have implications for other crops, such as canola, in Canada.
Since the beginning of 2023, Obrador has altered his pledge in reaction to calls from the U.S. for legal action under the United States-Mexico-Canada trade agreement. A Feb. 15 announcement stated Mexico “would no longer plan to ban all genetically modified corn imports by 2024. Instead, it will continue to allow GM corn for animal feed and manufactured products for the foreseeable future.”
This was followed by a decree calling for a ban on imports of biotech corn for “certain purposes”, effective Feb. 20. Imports of biotech corn for animal feed will continue as the government seeks suitable alternatives.
Unlike the U.S. outlook, where growers and the marketplace would have to adjust export expectations, Canada has little direct involvement in this dispute. The challenge may come in any fallout that might affect agriculture in this country, says Ron Campbell of the Ontario Agri-Business Association.
“We’ve seen it in Europe with how much time they take to approve GMO traits compared to North America,” says Campbell, the association’s operations and member service manager. “That’s why there’s interest in this, around how these non-tariff trade barriers are treated and how much leeway a country’s going to have to put protection in place.”
The other challenge is the Obrador government’s populist approach, which tends to ignore sound science and create a disconnect between producers and consumers. It’s also a way to stand up to the U.S., which Campbell says is done through food and can create an emotional response.
“They’re also positioning this as trying to protect their native strains of corn from GMO and being contaminated,” he adds. “On the other hand, it’s simple math that shows there’s no way they could grow enough corn to fill that need.”
The search for a suitable replacement has caught the attention of Scott Krakar from London Agricultural Commodities. Like Campbell, Krakar believes replacing 17 million tonnes of corn, in the case of a complete ban, would be a big ask.
“But the Mexican consumer has a lot to lose, in high-priced commodities and looking for replacements that would probably come at a higher cost, affecting inflation,” says Krakar, a grain merchandiser. “With higher interest rates, poorer consumers would find it difficult as food prices rise.”
He says the bottom line is that everyone involved stands to lose. Potential wealth is lost whenever free trade is impeded. The U.S. can grow large volumes of corn cheaply and the Mexican consumer relies on imports. No other countries grow non-GMO corn in such quantities.
“Where are you going to buy 17 million tonnes of non-GMO corn when the three largest growers – Argentina, Brazil and the U.S. – all grow GMO?” asks Krakar. “It’s a natural fit that there’s a country to the north which can do that, and Mexicans have a great need for it.”
How this affects Canada may become apparent, depending on the fallout from USMCA actions. A country outside North America could use this as a legal precedent and challenge trade of other commodities.
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“A bigger issue for Canada is if Mexico asserts GM crops are bad for people and they make this assertion without any supporting scientific data,” says Angus Kelly, director of Public Policy, Trade and Biotechnology with the U.S.-based National Corn Growers Association.
“All of a sudden, canola, soybeans and cottonseed oil are implicated. Today it’s corn and Mexico. Tomorrow, what crop is next and which country will anti-modern ag activists find a foothold in next?”
Kelly also notes the Mexican dispute is not a grassroots movement. It’s coming from the top of government, not from the general populace. That means the leaders are out of touch with the population.
– Read more from Ralph Pearce on this topic at Country Guide.