The U.S. last week requested a dispute settlement panel to step in during its legal fight with Mexico that involves corn sales and can result in a rare trade war between neighbors.

The New York Times reported that Mexico purchased more than 20 million metric tons of corn from the U.S. from 2021 to 2022. The loss of business would be a disaster for American corn farmers because Mexico is the biggest foreign buyer, the report said. Mexico spends about $3 billion worth of corn annually from its northern neighbor. 

American farmers say an import ban would cause both massive economic losses for Mexico’s agricultural industries and its citizens. About 90 percent of the corn grown in the U.S. is genetically modified.

The U.S. claims Mexico is disregarding the 2020 U.S.-Mexico-Canada Trade Agreement. If the settlement panel sides with Washington in the dispute, the U.S. can impose tariffs on Mexican products in retribution. 

Mexico’s Economy Department said it will continue to defend its position.

President Andrés Manuel López Obrador brushed off concerns about the trade agreement and said the issue is very important for his country.

“No treaty in the world allows people to sell merchandise that damages health,” he said, according to the Associated Press. 

TREND FORECAST: We have long reported that Mexico does not want to buy genetically modified corn from the U.S. and claims not enough is known about the health ramifications to the public from ingesting the product. Washington insists that modified corn is fine and Mexico City is being unreasonable. (See “U.S. MOVES TO FORCE MEXICO TO BUY ITS ZOMBIE CORN” 6 Jun 2023, “U.S. CHALLENGES MEXICO’S IMPORT BAN OF ZOMBIE CORN” 14 Mar 2023, “U.S. TO MEXICO: SWALLOW GMOs OR ELSE” 6 Dec 2022 and “BON APPÉTIT: ‘FOREVER CHEMICALS’ USED IN PESTICIDES SPRAYED ON FOOD CROPS IN U.S.” 16 May 2023.)

We forecast that Mexico will not cave to American pressures to buy GMO corn. As a result, Washington will take aggressive measures of some form to punish the Mexican government.  

TRENDPOST: Supporters of genetic engineering say it will help meet the world’s demand for food. Genetic modification can increase corn yields by up to 10 percent.

Life Sciences published a report in 1999 that found one of the toxins found in genetically modified corn, called Bacillus thuringiensis (Bt), can cause a “significant immune response.”

Bt is a naturally occurring bacterium in the soil that produces proteins specifically active against certain insects. Some crops such as corn, cotton, and soybeans have been genetically engineered to express the Bt genes that act as insecticides, according to Harvard.

It is illegal to grow GMO corn in Mexico. Farmers in the U.S. modify corn to be resistant to glyphosate, which is an herbicide intended to kill weeds and protect crops. Mexico cited studies that found glyphosate is likely a carcinogen in humans.

The AP reported that the panel will have about “half a year to study the complaint and release its findings.”

Bloomberg noted that the corn dispute is unlikely to hurt other trade agreements between the U.S. and Mexico but could hurt the Biden administration’s ability to work with the Mexican government on topics like migration and fentanyl production.

The Mexican president said he will accept the decision by the trade panel.