(Bloomberg) -- The US escalated its complaint that Mexico’s ban on genetically modified corn violates the nations’ free-trade deal, heightening tensions between neighbors.
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The US Trade Representative’s office on Thursday said it’s establishing a dispute resolution panel under the US-Mexico-Canada Agreement. The panel of trade experts — whose findings are binding — would be charged with deciding whether Mexico’s corn policy is inconsistent with the trade pact. If the group sides with the US, it could ultimately result in tariffs on Mexican goods.
Read more: US Set to Escalate Claim Mexico Corn Policy Violates Trade Deal
US Trade Representative Katherine Tai had requested formal talks on the issue with Mexico under the trade pact in early June, starting an initial 75-day clock that expired Wednesday.
Although the corn dispute is unlikely to interrupt otherwise robust trade between the countries, it could make it more difficult for the Biden administration to win Mexico’s cooperation on other issues including migration and the trafficking of fentanyl.
American officials have repeatedly criticized the Mexican government’s prohibition on GMO corn for human consumption, calling the policy unscientific. Imports of GMO corn for animals is allowed, although USTR is concerned that the Mexican government intends to phase that out as well.
Mexico’s Economy Ministry said in a statement that it is prepared to defend its position and that its rules on GMO corn don’t violate the trade pact.
The escalation risks complicating the relationship between the two nations, given that Mexican President Andres Manuel Lopez Obrador, known as AMLO, reacted angrily to a US request for talks over his nationalist energy policy little more than a year ago. Mexico is the US’s largest trading partner, with almost $400 billion in commerce through the first half of this year, according to data from the US Commerce Department’s Census Bureau.
Although the bulk of the corn that Mexico imports is used as animal feed, the vast majority of US corn is genetically modified, leaving growers concerned about losing a major market for their products.
“Mexico’s decree, which runs counter to scientific findings and is in direct violation of USMCA, is negatively impacting American corn growers,” National Corn Growers Association President Tom Haag said in a statement. “U.S. officials have exhausted every avenue trying to resolve this conflict and are left with no other choice but to turn to a third-party panel in hopes of quickly rectifying this issue.”
--With assistance from Maya Averbuch.
(Updates with Mexico’s response in sixth paragraph)
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