U.S. accuses Mexico of violating trade deal

Mexico is not living up to commitments it made under the United States-Mexico-Canada Agreement, say U.S. officials.

Sharon Bomer Lauritsen, agriculture trade policy consultant with AgTrade Strategies, said Mexican president Andres Manuel Lopez Obrador’s (AMLO) administration is flagrantly violating terms of the USMCA, which replaced the North American Free Trade Agreement.

He issued a decree last year calling for bans on genetically modified corn and on the use of glyphosate by 2024.

“The Mexican presidency, the AMLO administration, seems to be following the European model of taking production tools out of the hands of their farmers,” said Bomer Lauritsen, who in her former role as assistant U.S. Trade Representative helped negotiate the USMCA.

She told delegates attending the American Seed Trade Association’s Policy and Leadership Development Conference 2021 that Mexico has stopped issuing import permits on glyphosate and on GM corn, which violates the terms of the agreement.

Mexico’s National Farm Council recently told Reuters that the Mexican government is holding up import permits on GM corn even though the ban is not supposed to take effect for another three years.

The president of the National Farm Council told Reuters there is no indication that feed corn will be exempt from the ban, contradicting recent comments made by U.S. agriculture secretary Tom Vilsack.

Bomer Lauritsen said there are provisions in the USMCA that all three countries would form a working group on biotechnology that would meet within the first year of the agreement. That did not happen.

She also noted that Mexico is required to review applications on GM trait approval on a regular basis, but the country hasn’t approved a GM trait in four years.

The original vision of the U.S. was that the USMCA would streamline the biotech approval process in Canada and Mexico.

“Clearly with the AMLO administration they’ve taken a different approach,” she said.

USTR staff have raised the glyphosate and biotech issues on multiple occasions during meetings of the agreement’s sanitary and phytosanitary committee.

Vilsack has also raised the trade irritants with his counterpart in Mexico.

“But we know that the decisions on these issues is coming out of the Mexican president’s office and not the Mexican secretary of ag,” said Bomer Lauritsen.

She noted that USTR ambassador Katherine Tai has raised the biotechnology issue, but her enforcement priorities for the agreement appear to be labour and the environment.

Bomer Lauritsen said it may take a while for the U.S. to take action. It took nine months for the USTR to launch a WTO trade dispute against Canada for what it believes is a violation of USMCA provisions on the administration of dairy tariff rate quotas.

Jason Hafemeister, Vilsack’s trade counsel at the USDA, said it is easier to compartmentalize trade disputes with Canada than it is with Mexico.

Canada and the U.S. have been in a trade spat for 30 years over softwood lumber, but it doesn’t affect the broader trade relationship between the two countries.

The Mexican situation is dicey because of economic challenges in that country and the “dynamic political environment.”

“They are under more pressure. We see that politically with the grandstanding on some of the pesticide policies (and) about self-sufficiency in agriculture,” said Hafemeister.

“There is a political impulse out there that they’re having to scratch.”

Mexico was the third largest market for U.S. agricultural exports in 2020 behind China and Canada. However, trade has plateaued in the last few years under the new administration.

“Mexico is a difficult place. Their politics are very squirrely right now, so nothing can be taken for granted down there,” said Hafemeister.

Bomer Lauritsen thinks the U.S. needs to be joining other trade pacts, in particular the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

But she doubts that will happen under U.S. President Joe Biden’s administration.

“I don’t think it will satisfy the current leadership in Congress or the current administration because it doesn’t have the labour provisions of USMCA,” she said.

It would be difficult to get any further labour concessions from Vietnam and other CPTPP signatories, she added.

However, she thinks it would be foolish for the U.S. to remain on the sidelines with the United Kingdom now in talks to join the CPTPP.

“If we want to be competitive in those markets, we need to have the same tariff levels,” said Bomer Lauritsen.

Contact sean.pratt@producer.com