Time for new approaches to US-Mexico corn trade
Published: December 9, 2022
Category: Market News, The Non-GMO Blog
By Karen Hansen-Kuhn, opinion contributor
As the world reels from the latest supply chain disruption, there is a growing movement internationally to rebuild resilience by increasing domestic production of food for local markets. This is a time for new solutions; unfortunately, there is growing pressure on trade officials to lock in business-as-usual approaches in this new era. Trade will always be an element of sustainable food supplies. However, given the turmoil and supply disruptions in international markets in recent years, some countries are making plans to diversify the sources and types of production needed to feed their people.
Mexico is one such country. When President Andres Manuel Lopez Obrador took office in 2019, one of his first initiatives was to establish an official program for food self-sufficiency. Early in his term, his administration announced a series of programs designed to increase local production (especially by smallholder farmers) at fair prices and to transition to production methods that are healthier for the environment and public health. These initiatives included a plan announced in December 2020 to phase out the use and imports of glyphosate and GMO corn by 2024.
Recent pressure on the Office of United States Trade Representative (USTR)by U.S. corn exporters has raised alarms about supposedly unfair restrictions on their sales to Mexico. They claim that the U.S.-Mexico-Canada Agreement (USMCA) requires Mexico to approve goods produced using agricultural biotechnology — that’s not the case. In fact, while USMCA sets out a process to consider approval of those goods, it also explicitly states that nothing in the agreement requires countries to reach any conclusion.
Mexico has a sovereign right to determine the rules governing its food system. The U.S. has its own restrictions on imports to ensure food safety. The EU has restricted production and imports of GMOs for decades, as have other countries around the world. Trade rules require that those processes not be arbitrary or unfairly discriminate against particular countries, but they must not be used to overturn public initiatives to enhance countries’ ability to feed their nations more sustainably.
Despite allegations by U.S. corn exporters, Mexico is not banning imports. The North American Free Trade Agreement (NAFTA), which was replaced by the USMCA, required the Mexican government to phase out its tariff protections for corn over 15 years. It actually accelerated that timetable, leading to an abrupt increase in exports of cheap U.S. corn (and other commodities) to Mexico at prices well below the cost of production. My organization, the Institute for Agriculture and Trade Policy (IATP) has calculated the rates of dumping for corn, wheat, rice, soy and cotton since the 1990s. During NAFTA’s first decade, corn was exported at an average of 15 percent below the cost of production. As of 2017, dumping rates were 9 percent for corn, 38 percent for wheat and 3 percent for rice.
According to census data calculations by researchers at the Mexican Centro de Investigación y Docencia Económicas, some 4.9 million Mexican family farmers were displaced after NAFTA, with about 3 million becoming seasonal workers in agro-export industries. This shift was part of a dramatic reconfiguration of supply chains and a sharp increase in corporate concentration in agriculture in North America, as global firms shifted different stages of production among countries to reduce costs. Production of feed corn by ever larger farmers in Mexico expanded alongside corn imports from the U.S., contributing to the vicious cycle of farm loss and corporate concentration that has hurt farmers in both countries.
The transition to greater national sufficiency in corn and other food supplies has been planned for years and clearly won’t happen overnight. In the meantime, the Mexican government is exploring where it can purchase corn that meets its needs. This could include purchases of non-GMO corn from the United States. The Organic & Non-GMO Report notes that in 2020, U.S. farmers planted 7.49 million acres of corn produced without GMOs. U.S. producers who want to sell to Mexico could shift their production methods ahead of the 2024 planned transition to satisfy Mexico’s consumers and laws.
The disruptions to food supplies sparked by the COVID-19 pandemic, supply chain disruptions and increasing climate chaos demand new approaches. Mexico’s planned transition is one such response. The U.S. should learn from that kind of initiative rather than doubling down on the failed agriculture and trade policies of the past.
Karen Hansen-Kuhn is program director at the Institute for Agriculture and Trade Policy, where she leads work to challenge free trade agreements as they relate to food and farm systems and to advance agroecological solutions.
Source: The Hill
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Organic & Non-GMO Insights December 2022