U.S. demands formal talks with Mexico over GMO corn dispute
CHICAGO/WASHINGTON, March 6 (Reuters) - The United States requested formal trade consultations with Mexico on Monday over U.S. objections to its southern neighbor's plans to limit imports of genetically modified corn and other agricultural biotechnology products.
The U.S. Trade Representative's office announced the request for technical talks after months of informal discussions with Mexican officials over their plans to ban GMO corn for human consumption failed to satisfy U.S. trade officials.
The consultations are the first formal step toward a U.S. request for a dispute settlement panel under the U.S.-Mexico-Canada Agreement on trade (USMCA) that could ultimately lead to retaliatory U.S. tariffs if no resolution is reached.
The dispute could further strain U.S.-Mexico relations. U.S. officials say it puts some $5 billion of U.S. corn exports to Mexico at risk and could stifle biotechnology innovation at a time of high food inflation as increasingly severe weather threatens crop production.
"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," U.S. Trade Representative Katherine Tai said in a statement.
"We hope these consultations will be productive as we continue to work with Mexico to address these issues."
Mexico's Economy Ministry said in a statement that it viewed the U.S. request as seeking a solution in a "cooperative way," and would use the consultations to show that its policies have caused no trade harm.
The Mexican government has previously described Washington's disagreement with its policies as politically motivated.
The United States has previously threatened to take the issue to a trade dispute panel under the trilateral agreement with Mexico and Canada over the plan, which would ban genetically modified corn for human consumption.
The United States and Mexico have also been in talks since July to resolve a separate dispute over Mexico's state-driven energy policies, which USTR says discriminate against U.S. companies.
GROUNDED IN SCIENCE
Washington will do whatever is necessary to ensure U.S. farmers and exporters have "full and fair access" to the Mexican market, U.S. Agriculture Secretary Tom Vilsack said in a statement.
"We remain firm in our view that Mexico's current biotechnology trajectory is not grounded in science, which is the foundation of USMCA."
The consultations are requested under USMCA's chapter on food safety, which requires a science-based approach to national regulations.
USTR officials declined to speculate on potential retaliatory measures that could be taken under USMCA enforcement rules if the dispute remains unresolved, saying they were focused on the consultations leading to a satisfactory outcome for both countries.
"The core resolution that we're seeking really is transparent and predictable access to the Mexican market - to be able to continue to export the types of products that we have exported for decades, and that Mexico recognizes the safety of these product," one of the USTR officials told reporters.
Mexico's limits on genetically modified corn threatens "serious harm to U.S. farmers and Mexican livestock producers," the official added.
USTR said the United States exported $28 billion in agricultural goods to Mexico in 2022, with about $43 billion in ag imports from Mexico.
Corn for food use comprises about 21% of Mexican corn imports from the United States including both white and yellow corn, a representative from the National Corn Growers Association said, citing U.S. Grains Council data.
The corn growers' lobby group called on the USTR to expedite the process under the USMCA.
"Mexico's position on biotech corn is already creating uncertainty, so we need U.S officials to move swiftly and do everything it takes to eliminate this trade barrier in the very near future," said NCGA President Tom Haag.
USTR's move won praise from a number of U.S. lawmakers who have been clamoring for the Biden administration to take a harder stand on the issue.
"I'm grateful USTR has chosen to take a stand for American trade and begin the dispute process with Mexico over its ridiculous GMO corn ban," Republican Senator Chuck Grassley, himself an Iowa farmer, said in a statement.
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