Corn opens another front in the T-MEC

In 2018 AMLO said it and they thought nothing was going to happen. In 2020, President López Obrador signed a decree on the subject and they continued to think that nothing was going to happen. Now it is clear: the project to eliminate imports of transgenic corn is firm. There is a deadline that is met in 2024. The storm clouds are in sight, how big will the storm be?

The decision of the government of Mexico has the support of individuals and associations that call for a firmer policy in defense of Creole corn. It is an original crop from Mexico and has at least 59 varieties. Against it is the United States Government, farmers in the Midwest of the United States and many companies that operate in Mexico, those that produce genetically modified seeds, such as Monsanto, and those that use corn intensively as an input to produce animal feed. , flours and starches.

Two questions are key: How will Mexico replace the corn that it now buys from the United States? And how will the United States react if the deadlines set by the Mexican government are met?

Mexico is the main buyer of yellow corn from the United States. In the short and medium term, it would not have the capacity to replace with national production everything that is purchased from its neighbors to the north. Since 2019, corn production has increased by just around 1 or 2% per year, largely due to fertilizer distribution programs to producers with limited resources and low productivity. Mexico is self-sufficient in white corn, which is used primarily for human consumption. It produces about 27 million tons per year.

What about the United States? The Mexican position has been the subject of binational dialogue for some time, but the issue has been gaining in intensity throughout 2022. In September, the Biden administration’s Secretary of Agriculture, Tom Vilsack, expressed his concern and called for more clarity to the Mexican government. He warned that the matter could lead to a controversy that would be resolved within the framework of the T-MEC. In the same vein, this week two US senators spoke out, Chick Grassley and Joni Ernst, who requested the intervention of Katherine Thai, US trade representative.

On the part of Mexico, it seems that the role of the soft police corresponds to the Secretary of Agriculture, Víctor Manuel Villalobos, while the role of tough police corresponds to the Undersecretary of Agriculture, Víctor Suárez. He told Reuters that Mexico is determined to suspend imports. He warned that we could buy corn that is not genetically modified from Argentina and Brazil. He used a phrase that deserves to be in any summary of the year: “the T-MEC is not God.”

At stake is a lot of money and the rules of the binational agri-food trade game, from which Mexico has benefited with fruit and vegetable exports. In 2021, Mexico imported 15.5 million tons of yellow corn from the United States. The value of imports was 5,000 million dollars. These are record figures and everything seems to indicate that in 2022 the marks will be exceeded, because between January and September Mexico has bought 1.5% more than in 2021.

The solution will not be easy, neither within the USMCA, nor in the context of replacing the United States as a supplier. The USMCA does not explicitly include any prohibition on the use of biotechnology in the production of marketable food. In fact, free trade agreements and the World Trade Organization are based on a principle called substantial equivalence, according to which transgenic corn is equivalent to conventional hybrid corn, because it has the same physical and chemical composition.

MAIZALL, an international chamber that represents producers from Argentina, Brazil and the United States, which represents those responsible for 80% of world corn exports, has said, according to Reuters, that it will not change its corn production methods to non-GM. to adapt to Mexico. Not even for a market worth 5 billion dollars a year?

lmgonzalez@eleconomista.com.mx