Mexico moves closer to a devastating policy for US agricultural exports

Mexico is set to phase out the herbicide glyphosate and all biotech corn for human consumption by the beginning of 2024. U.S. Agriculture Secretary Tom Vilsack says he has been “reassured” by his Mexican counterpart that the ban won’t hurt U.S. corn exports — but that’s little comfort to domestic growers who are watching the health regulator in Mexico, their largest export market, exercise an apparent bias against the herbicide and seed varieties used in the United States for the past several decades.

The move coincides with efforts by Mexican President Andrés Manuel López Obrador to boost corn production of relatively small Mexican farms. Both U.S. farmers and Mexico’s poorest consumers stand to lose out.

Congress has long had its eye on the looming clash with Mexico over biotech exports. In a letter last year, 76 members from both parties urged President Biden to “prioritize US agricultural biotechnology competitiveness” in talks with Mexico City and to “use the enforcement tools provided to you in the United States-Mexico-Canada Agreement to secure fair treatment for American agricultural producers and rural communities.”

Farmers in the United States and around the world use glyphosate (often known by the brand name Roundup) to kill weeds before planting corn feed for livestock, and to speed the harvest of some grain and other crops. If you are a homeowner, chances are it is also in some of your lawn and gardening care products. The Environmental Protection Agency has found “no risks of concern to human health when glyphosate is used in accordance with its current label.”

U.S. corn growers have been using biotech seed varieties since the 1990s to control damaging insects and improve weed control. Notwithstanding, some European countries cite health and ecosystem concerns when contemplating import bans on biotech corn, while others characterize such concerns as veiled protectionism.

Human efforts to cross-pollinate plants have been around for thousands of years. For example, agricultural historians point to “dwarf wheat” developed by the American agronomist Norman Borlaug in the mid-20th century. The high yield and disease resistant crops were introduced around the world in the 1960s and ‘70s, and Borlaug was awarded the Nobel Peace Prize in 1970 for his contributions to world food supply.

Corn growers on both sides of the border have increased yield over the years, but Mexican corn farmers are no match for their U.S. counterparts. The U.S. Economic Research Service reports that Mexican white-corn producing states averaged 3.4 metric tons per hectare between 2014 and 2017, compared with U.S. average yields of 10.9 metric tons. U.S. farms are large and there are many of them; America is the world’s largest corn producer and accounts for 34 percent of global production, compared to Mexico’s 3 percent.

Since 2008, U.S. corn exports to Mexico have been free of tariffs and quota restrictions thanks to hard-fought provisions in NAFTA. But Mexico’s white-corn farmers have been among the pockets of lasting unhappiness from that agreement, and they seem to have found a partner in López Obrador. His administration has prioritized the country’s smaller farms, and a ban on biotech corn and glyphosate appears to be part of that broader effort. The cost, however, is steep.

A new study by World Perspectives shows that a ban on genetically modified corn would lead to an expansion in Mexico’s white corn sector but harm both countries. For Mexico, economic output would fall by approximately $20 billion, with annual job losses of 60,000. Corn farmers would benefit from prices rising 48 percent in the first year and about 19 percent over a 10-year period. But the rest of the country would suffer higher food prices, especially the 44 percent of the population that lives below the poverty line. For them, corn prices are the single largest indicator of access to food.

For the United States, the ban would cause economic output to fall by approximately $74 billion, and annual job losses would be approximately 32,000. U.S. corn growers would experience a loss of $13.61 billion over a 10-year period. The transportation industry responsible for getting that corn to Mexican buyers would also feel the pinch. The rail industry alone would lose $3.3 billion over the 10-year period.

U.S. negotiators fought long and hard for the agriculture provisions in NAFTA. A mutually beneficial relationship has ensued. Recent moves by López Obrador risk throwing that away. Washington would be nuts to sit this one out.

Christine McDaniel is a senior research fellow with the Mercatus Center at George Mason University.