In this government, sovereignty is invoked at the slightest provocation. That we import most of the gasoline we use because it’s cheaper in the US? It will be necessary to regain “sovereignty” by building a refinery that will cost at least double what was initially promised. That the private sector contributes to electricity generation in the country? Let’s reclaim “sovereignty” by changing the laws and market structure to (theoretically) strengthen CFE, even if we damage the country’s competitiveness and growth potential. That the President doesn’t want to go to international summits? Well, let’s claim sovereignty in determining Mexico’s foreign policy. That we don’t produce all the food that is consumed in the country? Let’s appeal to sovereignty and add the term food to justify harmful protectionist policies for Mexico’s agribusiness.
What will Mexican sovereignty look like if we stop receiving yellow corn from the United States in a few months? How sovereign will we be if we destroy the country’s livestock potential?
On the last day of 2020, an executive order was released banning the federal government and its agencies from buying, using, importing or distributing glyphosate or any other agrochemical containing it in the Mexican market. The same decree stipulates that the biosecurity authorities must revoke and not issue permits for the release of genetically modified maize seeds into the environment by January 31, 2024 at the latest. It includes the revocation and failure to issue permits to use modified corn kernels to feed the population.
The topic is gaining relevance because the application deadline is approaching. The decree has a big problem. It does not specify what would happen to imports of transgenic maize not intended for human consumption. Ambiguity opens the door to different interpretations and thus to different conflicts.
In Mexico, we import yellow corn for livestock, as fodder, an important export sector. For white corn — the one we use for tortillas and human consumption — Mexico is self-sufficient, with less demand than it produces, but that’s not the case with yellow corn. The decree assumed that between 2020 and its enactment, Mexico would have to produce more yellow corn and not import it. Fatal error in approach. That just didn’t happen.
Local production of yellow corn has remained relatively stable over the past 10 years in relation to the total grain supply. In the most recent agricultural cycle, the supply of yellow corn was just over 22 million tons. Local production was nearly 3.18 million and imports were over 16.67 million. In other words, 75% of the total supply of yellow corn is imported primarily from the United States, and that share has only increased since the decree was published. There is no domestic production that could replace importing this grain.
Most of the yellow corn, 80%, goes to livestock farming, where it is used as fodder. But 15%, no less percent, is used in the starch industry to make flour and fructose.
With this data, the effects of the measure should already be apparent. If Mexico prevents the import of these inputs for the livestock sector, the ability to produce beef, pork, chicken, eggs and milk will be immediately affected. The decree has a destructive potential for national industry that we have not weighed in its just dimension.
For the last year, President López Obrador has been concerned – and rightly so – about rising food prices. If this decree were implemented as planned starting next year, prices would react immediately to a brutal shortage of animal products. There is nothing more expensive than what you don’t have.
The decree would affect national production, which not only remains in Mexico for local consumption but is also exported. Just for illustration, more than a third of the beef that the United States imports comes from Mexico.
The decree’s provisions would seriously damage the country’s agricultural sector, make food more expensive and halt investment in a sector that has thrived in recent years, including the years of the pandemic. But beyond that, it was already opening the door to another commercial conflict.
Mexico, in talks with its trading partners on the matter, has indicated that the ban applies only to corn for human consumption and is willing to delay the decision until 2025. The United States has already made it clear that it does not agree with this stance and is prepared to escalate the matter. United States Secretary of Agriculture Tom Vilsack and the USTR’s Office of Trade Representatives believe that the measures Mexico is committing to are not enough.
Mexico’s rationale in the decree mentions “some research” suggesting possible risks from the use of glyphosate, without any solid arguments. The United States claims that Mexico is making a decision that is not based on scientific arguments, as the TMEC states that this type of decision must be made. On the other hand, food sovereignty and self-sufficiency are mentioned, which have nothing to do with the health risks mentioned in Chapter 9 of the trade agreement.
Several agricultural organizations in the United States and some members of Congress have requested that a dispute settlement process on the issue begin as soon as possible, beginning with a period of consultations that could lead to the formation of a panel and the possible imposition of trade sanctions.
There is much talk about the potential of nearshoring for Mexico, the opportunity to change the face of the country and increase growth and jobs for Mexicans. At the same time, however, laws are being changed and regulations issued that are damaging the country’s production capacity and throwing us into severe trade conflicts.
What will the country look like without a strong agricultural industry? How will Mexicans live with significantly less access to meat, milk and eggs? What will this food sovereignty look like?
PS Thanks to Ana Gutiérrez, IMCO Foreign Trade Coordinator, for her support of this column.
Subscribe to continue reading
Read without limits