Corn War: a Trade Fight Between the United States and Mexico

Abstract

An international fight grows over corn. The United States claims that México’s ban on genetically modified (GMO) corn violates the USMCA (NAFTA’s update). México prohibits GMO corn for human consumption. American arguments focus on Sanitary and Phytosanitary Measures (SPS), covered in Chapter 9 of the USMCA. A trade panel will review these.

This Essay describes and predicts. First, it describes SPS arguments and relevant trade rules. American complaints emphasize that the ban is excessive, is not consistent with international standards, and mishandles risks. Second, the Essay identifies the obstacles American positions face: weak mandates and deference to México. Chapter 9 does not require conformity with international standards or risk assessments. It only requires that México consider these. Plus, Chapter 9 defers to Mexican determinations on food safety, labelled the “appropriate level of protection” under USMCA and WTO rules. The panel will defer to this level set by México and then evaluate American complaints on standards, trade restrictions, and risks. The upshot: the USMCA is not the free trade answer the U.S. seeks. Because of this, it should pursue resolution versus fruitless legal conflict.

Keywords: international trade, USMCA, agriculture, GMO, corn, biotechnology

JEL Classification: F1, F10, F13, F18, Q1, Q17, Q18, Q27, Q37, Q56, I18, N56, O13