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Genetically modified corn trade fight heats up in Mexico

Much-watched CUSMA case raises public morals and environmental justifications for Mexican food measures—and first-of-its-kind Indigenous Peoples’ defence

April 23, 2024

13-minute read

A major case is currently making its way through a North American trade tribunal, with ramifications for Indigenous rights, food sovereignty, and environmental policy in one of the world's largest free trade zones.

Later this year, the tribunal, established under the Canada-United States-Mexico Agreement (CUSMA), will pass judgment on the limits of food safety, food sovereignty and environmental measures under the renegotiated North American trade agreement. This is the first trade dispute ever to consider the breadth and limits of a general exception clause for Indigenous Peoples’ rights (Article 32.5).

We bring the CUSMA dispute up to date by summarizing the initial U.S. complaint, Mexico’s initial defence, a third-party submission from Canada, and a handful of submissions from non-governmental organizations with an interest in the outcome of the dispute. A U.S. rebuttal to Mexico’s initial defence will be published the week of April 29.

The dispute relates to two measures in a February 2023 decree from the Mexican government regarding the pesticide glyphosate and genetically modified corn. Article six of the decree directs Mexican biosafety authorities to revoke, and refrain from issuing, authorizations for GM corn grain for human consumption. This applies to corn used for nixtamalization and flour processing, commonly used for tortilla and dough. The other measure directs Mexican biosafety authorities to gradually substitute GM corn used for animal feed and human consumption with non-GM corn.

Both the nature and effect of the decree will be scrutinized by the three-person CUSMA tribunal this year. According to the U.S., the decree marks an abrupt change in policy, is an illegal importation measure, and is not based on sound science. Mexico argues that the measures are purely domestic in nature and legitimate, even under CUSMA’s strict rules on so-called sanitary and phytosanitary standards (SPS). They contend further that the science relied on by the U.S. to defend GM corn is not as sound as they claim.

The U.S. claim against Mexico

In its initial submission filed last October, the U.S. accuses the Mexican government of an abrupt change in policy affecting U.S. agricultural trade. After permitting the importation and sale of GM corn in Mexico for decades, Mexico now “seeks to eliminate the importation and sale of GM corn for human consumption and animal feed, threatening billions of dollars of U.S. exports to Mexico and wholly undermining the commitments that Mexico made under the CUSMA, without scientific basis,” claims the U.S.

The U.S. challenges two measures of the 2023 Decree concerning GM corn that it believes to be inconsistent with Mexico’s obligations under Chapter 9 of CUSMA (sanitary and phytosanitary standards, or SPS) and the national treatment obligations in Chapter 2 (market access for goods).

The first measure is characterized by the U.S. as a ban on the importation and sale of GM corn for use in dough and tortillas (the “Tortilla Ban”). Mexico disputes this characterization, however, asserting that this policy relates to domestic production, not importation. The second measure contested by the U.S. is Mexico’s announcement in the decree that the government will gradually substitute non-GM corn for GM corn used for animal feed and human consumption (the Substitution Instruction).

Further, the U.S. purports to outline the benefits of genetically modified crops, claiming their contribution to increased agricultural output and securing food supply in the face of climate change, the alleged benefits of biotechnology to the environment, and the safety record of GM crops and associated recombinant DNA technologies.

The U.S. argues that the “Tortilla Ban” and “Substitution Instruction” implemented by Mexico are SPS measures subject to CUSMA Chapter 9 obligations. In the U.S. view, the measures aim to safeguard human or plant life or health, and do so in a way affecting trade, directly or indirectly, between the CUSMA parties.

The U.S. asserts that these measures violate several articles of the SPS chapter because they lack a basis in relevant international standards and fail to consider existing instruments for managing trade in products of biotechnology such as those of the Codex Alimentarius Commission and the International Plant Protection Convention.

Additionally, the U.S. contends that Mexico has applied its new measures beyond what is necessary to protect human, animal, or plant life (Article 9.6.6[a]). Alleging a lack of foundation in relevant scientific principles (Article 9.6.6[b]), they argue that Mexico did not conduct documented risk assessments or management in a manner allowing other parties to comment (Article 9.6.7) and failed to consider available scientific evidence, WTO SPS committee guidance, or international standards in the risk assessments that were completed (Article 9.6.8).

Overall, the U.S. deems the measures to be more trade-restrictive than necessary to achieve the level of protection defined in the Mexican decree (Article 9.6.10). It further believes the measures constitute prohibitions or restrictions on the importation of goods from other parties (Article 2.11).

Mexico’s initial response

Mexico's initial rebuttal to the U.S. assertions can be thematically condensed into three main points.

First, Mexico contends that the contested measures fall outside the purview of the CUSMA. Second, should the tribunal disagree on this point, Mexico asserts that its measures are in compliance with the obligations outlined in the agreement’s SPS chapter. In the event the tribunal disagrees on this second point as well, Mexico asserts the measures are exempt from CUSMA disciplines under a number of provisions, including a general exception for Indigenous Peoples’ Rights (Article 32.5).

Mexico’s argument: The measures complained of fall outside of the scope of the CUSMA

Mexico contends that the measures in the 2023 GM corn decree fall outside the scope of the CUSMA. Regarding the "Substitution Instruction," Mexico argues that it does not yet qualify as an SPS measure "applied" under Chapter 9, as it pertains to future gradual substitution not yet implemented. Hence, Mexico considers the U.S.'s claim premature and urges its dismissal.

Additionally, Mexico asserts that the "Tortilla Ban" falls outside of the scope of Chapter 2 (market access for goods). Mexico argues that the decree doesn't aim to restrict importation but rather discourages domestic use of GM corn for direct human consumption. Mexico highlights that this ban doesn't affect U.S. imports, as U.S.-imported GM corn is primarily used for animal feed or industrial food processing, not direct human consumption targeted by the ban.

Mexico’s argument: The“Tortilla Ban” is necessary and appropriate

In response to allegations that their measures are more trade restrictive than necessary, Mexico defends the "Tortilla Ban" as necessary and suitable, asserting that it targets only GM corn used in direct human consumption in Mexico, allowing for other uses such as cornstarch production or animal feed.

Mexico argues that the ban is essential due to the health risks posed by GM corn, and submitted scientific evidence to the tribunal to support the claim. Mexico’s submission maintains that restricting GM corn only in direct human consumption ensures it is no more trade restrictive than required to meet the policy’s objectives.

Furthermore, Mexico contends that the 2023 decree establishes an appropriate level of protection, fulfilling another CUSMA obligation by aiming to safeguard human health from contaminants in GM corn, and protect native corn varieties from transgenic sequences (the pollution of native non-GM corn genes with GM varieties).

Mexico justifies this stance by highlighting the integral role of corn in Mexican culture and nutrition, where it accounts for a significant portion of daily calorie and protein intake (significantly greater than in any other country), emphasizing the cultural and historical significance of corn cultivation in Mexico and the risks posed by genetically modified corn.

Mexico’s argument: The 2023 Decree is permitted under CUSMA exception provisions

In the event the tribunal agrees with the U.S. that the measures in dispute are not compliant with CUSMA’s SPS provisions, Mexico says the measures are nevertheless permissible because they are intended to protect biodiversity and, importantly, meet Mexico’s legal obligations to Indigenous Peoples. The initial submission argues that the decree is essential for conserving Mexico's native corn and maize varieties, which it considers to be crucial exhaustible resources threatened by the presence of GM corn.

Drawing on a WTO dispute settlement precedent involving endangered species, Mexico also contends that corn and maize qualify as exhaustible resources vulnerable to depletion, warranting protection under CUSMA’s general exceptions clause (Article 32.1), which is based on Article XX of the General Agreement on Tariffs and Trade (GATT 1994). Therefore, Mexico asserts its measures align with CUSMA provisions and are necessary for preserving the biodiversity and genetic integrity of native corn varieties.

Non-governmental interveners

Shortly after the publishing of Mexico’s initial submission, many non-governmental organizations (NGOs) submitted their views to the tribunal. Of the 13 NGO requests submitted, 10 were initially accepted, but two NGOs—the Canadian Biotechnology Action Network and the Northumberland Chapter of the Council of Canadians—subsequently had their permission to submit comments rescinded by the tribunal at the request of the U.S. and Canada.

The full comments of the accepted and participating groups can be read here: IATP, Friends of the Earth, Center for Food Safety, ANEC, Semillas de Vida, Poder del Consumidor, PODER and the Grupo Vicente Guerrero.

The comments identify and advocate for the interests of an array of Mexican stakeholders including farmers, consumer organizations, and Indigenous persons. They offer support for Mexico’s arguments that the restrictions are necessary to protect the unique nature of corn in Mexico and local production systems, human health, and Indigenous rights to protection, amongst others.

Despite having initially taken up the issue of Mexico’s ban of glyphosate in their request for consultations on the GM corn decree, the U.S. subsequently excluded the glyphosate issue from the scope of its dispute with Mexico. The NGO intervenors and Mexico argue that the biodiversity, safety and health consequences of GM corn cannot be evaluated without also understanding the use of glyphosate in GM corn production.

According to Dr. Kendra Klein, deputy director of science for Friends of the Earth and co-author of that organization’s comments, “The U.S. government’s submission to the tribunal is seriously deficient. It lacks basic information about the toxins expressed in contemporary GMO corn varieties and their levels. The U.S. submission also ignores dozens of studies linking the insecticidal toxins and glyphosate residues found in GMO corn to adverse impacts on public health.”

Karen Hansen-Kuhn, director of trade and international strategies with another participating NGO, the Institute for Agriculture and Trade Policy (IATP), commented, “We welcome this vigorous defence of Mexico’s programs to transform its food system. The science they present backs up longstanding civil society campaigns for healthy foods and biodiverse agricultural systems. There’s a lot here that could contribute to more substantive debates on our food and agriculture system in the U.S., as well.”

Canada’s non-disputing party submission

While the U.S. and Mexico are the two main disputing parties in this case, CUSMA allows Canada to participate as a non-disputing (Article 31.14) third party. Canada requested non-disputing party status shortly after the U.S. requested the formation of a CUSMA dispute panel last August. Before that, Canada had requested SPS chapter consultations and CUSMA Chapter 31 dispute settlement consultations with Mexico in lockstep with the U.S.

In its March 15th submission to the panel (published April 4), Canada aligns with the U.S. stance that the “Tortilla Ban” and “Substitution Instruction” are SPS measures by definition and that they violate CUSMA rules.

Canada states that while it shares similar policy goals with Mexico related to the preservation of biodiversity and Indigenous culture, the measures lack a sound scientific basis and could potentially disrupt North American trade. Canada further asserts that even if Mexico’s GM corn decree had minimal or no effect on current trade between the parties, an SPS measure need only have a potential effect on trade to be found in violation of CUSMA.

Canada agrees with the U.S. that Mexico failed to adhere to international standards in its SPS measures, citing principles recommending against zero-risk policies including import prohibitions. The submission asserts that Mexico's measures are not proportional to identified risks, do not provide sufficient technical justification, and are not supported by an acceptable risk assessment or subsequent risk management plan.

As such, Canada claims the GM corn decree lacks a scientific basis contrary to CUSMA’s SPS rules. Canada concurs with the U.S. that Mexico’s precautionary ban represents the most restrictive trade measure possible, and that there's no credible scientific evidence supporting health risks from consuming GM corn, thus concluding that Mexico's measures are disproportionate and overly trade-restrictive.

Canada then turns to Mexico’s assertions that its GM corn measures would be justified under CUSMA’s general exceptions related to public morals and the conservation of exhaustible resources. The Canadian submission proposes that Mexico must prove “the objectives of its measures are fundamental questions of right and wrong in Mexican society that are the subject of public moral debate” (p. 147).

Canada says that the tribunal must then ascertain the extent to which the measure can be quantitatively or qualitatively shown to contribute to the protection of public morals. Canada disputes whether Mexico’s native corn varieties fit the definition of an exhaustible natural resource.

Indigenous rights exception

In its defence, Mexico raised CUSMA’s Indigenous Obligation Exception (article 32.5) which has subsequently received broad support from NGOs. This case would be the first to interpret an Indigenous Rights General Exception in any trade agreement involving the United States.

The provision provides a general exception applicable to the entire CUSMA for measures a country has “deemed necessary to fulfill its legal obligations to Indigenous People” provided that they are not a means of “arbitrary or unjustified discrimination” nor a “disguised restriction on trade.”

Mexico’s claim that the Indigenous exception is applicable in this case rests on both its international and domestic obligations. The Mexican constitution created the obligation of “preserving and enriching [...] all the elements that constitute [Indigenous] culture and identity” In Mexico’s initial defence, native corn varieties and the Milpa, an indigenous farming practice in Mexico, are asserted to constitute elements of Indigenous culture and identity which Mexico is obligated to protect. Mexico further asserted that its measures do not improperly discriminate nor restrict trade in violation of Article 32.5.

Several NGOs supported this position in their submissions. The IATP, for example, endorsed the position that Mexico was correct in deeming its Decree a measure necessary to fulfil Indigenous legal rights. The organization provided evidence of the long-term relationship between Mexico’s Indigenous Peoples and native corn landraces, justifying the assertion that protecting native varieties is part of the Mexican government’s legal obligation to Indigenous Peoples.

IATP also addressed the connection between protecting biodiversity and Indigenous rights, which is specifically recognized in CUSMA (Article 31.1), and backed up Mexico’s claim that the measures apply without discrimination to foreign and domestic producers and do not constitute a disguised trade restriction.

Canada’s submission is very interesting on this point. It asserts that, much like the national security exception in the GATT and most free trade agreements, the Indigenous Peoples’ rights exception is self-judging, meaning that the tribunal does not have the authority to second-guess a respondent state’s assertion that a measure was “necessary” to meet its legal obligations to Indigenous Peoples.

Canada asserts that, regardless of the self-judging nature of the exception, Mexico must still show a clear legal requirement that the challenged measure is objectively tied to (e.g., in the constitution or international law as incorporated in national law).

This may be a fairly simple hurdle for Mexico to overcome, given the multiple international and domestic obligations it cited, including its constitution, the Federal Law for the Protection of the Cultural Heritage of Indigenous and Afro-Mexican Peoples and Communities, Article 21 of the Pact of San José (as interpreted by the Inter-American Court of Human Rights), and International Labor Organization Convention 169 on Indigenous and Tribal Peoples in Independent Countries. Canada seems to be deferring here to Mexico’s sovereign right to determine how to meet its obligations to Indigenous Peoples.

However, Canada proceeds to state that even if Mexico can show a definitive legal source for the obligation, it must still prove that the measures do not 1) unjustifiably discriminate against persons of the other parties, and 2) are not disguised trade barriers, as described above. Of 48 WTO cases to February 2022 where the respondent state raised a GATT Article XX exception (the basis of the CUSMA general exceptions), only two were successful, according to a report from Public Citizen.

That doesn’t rule out a win for Mexico in this case, as there is strong domestic support in Mexico for the government’s change of policy on GM corn, but statistically the odds of success on a general exceptions argument are not especially good. This makes Mexico’s claim that the measures are nonetheless excluded under CUSMA’s Indigenous Peoples’ rights exception all the more interesting and important.

Earlier in its submission, Canada provided guidance to the tribunal for how these two tests (also taken from GATT Article XX) could be applied to determine whether Mexico’s GM corn ban is unjustifiable or a disguised barrier based on the alleged lack of scientific rigor in the risk assessment. In the case of the Indigenous exception, however, Canada provides no guidance whatsoever. It's up to the tribunal to determine if any discrimination against persons of the other parties in the corn ban and substitution order is rationally connected to the objectives of the measure in question.

What’s next?

According to the procedural timeline for the dispute, we should see the U.S. rebuttal to Mexico’s submission on April 30, followed by Mexico’s rebuttal to that submission on June 18. A hearing has been planned for the end of June and should be livestreamed for the public.

The timing of this dispute is of particular importance. We likely will not see the final report of the CUSMA panel before the U.S election in November, but it will land in the run-up to the six-year review period that the next U.S. president and accompanying government will be expected to lead. Mexicans will also elect a new president and government in June and this will affect how Mexico responds to the CUSMA review.

In any event, both possible results in the GM corn dispute—a “win” for the U.S. or Mexico—will potentially have a significant impact on political and public attitudes toward CUSMA in this review period.

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