The United States initiated a second request for consultations against Mexico by invoking Chapter 31 of the Dispute Settlement Agreement between Mexico, the United States, and Canada (T-MEC).
The request of the Government of Joe Biden ensures that the decree of President Andrés Manuel López Obrador, issued last February to maintain the ban on importing transgenic corn for human consumption, will affect US exporters.
The first consultation took place last March, when Katherine Tai, head of the United States Trade Representative Office (USTR), requested this process under Chapter 9 of Sanitary and Phytosanitary Measures of the USMCA. .
The difference between the two requests is that the first consultation was technical and the second legal.
The new request for consultations may lead to an arbitration panel and it comes a day after 62 GOP lawmakers asked the USTR to launch a panel against Mexico.
On Friday, Katherine Tai argued that “the United States has repeatedly conveyed its concern that Mexico’s biotech policies are not based on science and threaten to disrupt US exports to Mexico to the detriment of agricultural producers, thereby may exacerbate food security challenges.”
Panels are positive, says Ebrard
Hours later, The Ministry of Economy of Mexico responded that it will defend with “hard data and evidence” the prohibition of the use of transgenic corn for human consumption during the new consultations.
Mexican Foreign Minister Marcelo Ebrard described the panels as positive because before, “the United States applied tariffs to you and that’s it.” He recalled that he won a panel on the automotive rules of origin.
At the same time, the Secretary of Agriculture, Víctor Villalobos, assured that “there is no controversy. It is a panel to bring opinions; It is the opportunity to bring answers to the concerns that both countries have”.
For the Secretary of Agriculture of the United States, Tom Vilsac, “there is a fundamental disagreement with the position that Mexico has taken regarding this problem of biotechnologicals, which have proven to be safe for decades.”
He added that they will enforce their rights under the USMCA to support innovation, nutritional security and sustainability, in addition to seeking the mutual success of farmers and agricultural producers.
The consultations, which are a dispute resolution mechanism within the framework of the T-MEC, also refer to the rejection of authorization requests for the import and sale of certain biotechnological products, such as the herbicide glyphosate.
US farmers are concerned about the possible loss of the largest export market for the corn they produce. Mexico has been importing transgenic corn from the United States for years for an amount of about three billion dollars a year.
Both countries also have an open dispute over energy issues, to which Canada has joined. The United States maintains that Mexico unfairly favors state-owned electricity and oil companies over US competition and clean energy providers.
Technical discussion was exhausted by US delegates
Ansley Consultores Internacionales analyst, Roberto Zapata, commented that “this announcement clearly indicates not only that the concerns of the United States could not be resolved through technical consultations under Chapter 9 of the T-MEC, but also that the positions between the United States and Mexico on the matter they stay away.
“Hence the need to initiate a dispute settlement process under Chapter 31 of the treaty. In other words, the United States considers that the difference with Mexico will now have to be resolved through legal consultations, and the eventual establishment of an arbitration panel,” added the specialist.
Meanwhile, the foreign trade expert, Jorge Molina, said that the issue also has to do with financial issues because the Americans are defining financing for agricultural production and exports, which is related to the countries to which they will sell.
Finally, the former chief technical negotiator of the T-MEC, Kenneth Smith, said that “the technical discussion has been exhausted through the consultations under Chapter 9 of the T-MEC, and now it will be necessary to see if in the conversations in the In the context of Chapter 31, the Government of Mexico would be willing to eliminate the decree or make substantive changes to it in order to no longer impose any type of restrictions on the use of US corn in Mexico.”
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