Canada’s dairy lesson can help solve Mexico corn crisis

Trade is not nice or polite when it comes to agriculture. “Let’s not pretend that we're in a global free market,” said Prime Minister Justin Trudeau. We need “stability and certainty.” Especially when “food security is under threat,” Trade Minister Mary Ng added, describing policy options under the Canada-United States-Mexico Agreement (CUSMA).

This hardnose balance of values and commerce explains Canada’s success in protecting its dairy market, with a panel win over the United States recently in November. Canada’s supply management system provides security for dairy producers and Canadian consumers. Much of this is focused on stable prices that farmers attain and that households and businesses pay for milk, cheese and other products. To help everyone in the food chain, Canada prioritizes food security.

Mexico faces similar threats but with corn, something experienced since NAFTA’s implementation in 1994. The trade pact required tariff-free access to low-priced American corn, making Mexico vulnerable to unstable supplies and fluctuating prices. In 2006-07, it experienced a “tortilla crisis” when rising global demand for American corn led to price spikes for the grain, a daily staple for Mexicans. These experiences motivate Mexico’s current approach to CUSMA. In short, it contests the purported advantages of lower-priced U.S. corn.

For Mexico, what is at stake is having a secure supply of maíz (corn), needed on a daily basis, if not more frequently, by Mexicans. Just about any meal depends on corn, especially for rural and working-class communities. Otherwise, Mexico’s food security depends on what the U.S. exports, its prices and its determinations of what is safe or not.

Mexico’s food security goal is to determine how it feeds its people. So far, it has made impressive progress with various efforts. This includes the government buying corn from small- and medium-scale farmers at higher prices. It also aims to decouple the prices Mexican maíz consumers pay from the influence of overseas commodity exchanges. This looks similar to the benefits provided by Canada’s supply management system.

Because of this, Canada should give its dairy perspective, emphasizing food security, in an ongoing trade dispute over Mexico’s ban on genetically modified (GMO) corn.

Why? Because national values and necessities similarly motivate Mexico. Its ban is a food security measure. Replace “dairy” with “corn” and Mexican and Canadian justifications look more alike than different. Consistent positions from Canada would provide the needed certainty.

In a decree from February 2023, Mexico banned GMO corn for human consumption. This applies to tortillas or masa (dough). The ban does not touch corn in animal feed or industrial use.

Accordingly, the decree has no commercial impact. Just one per cent of American corn is white corn, which Mexicans eat and grow. Canada does not export corn to Mexico, while American farmers export yellow corn.

Nonetheless, the U.S. invoked a trade panel, erroneously citing export losses. Canada joined as a third party.

For Mexico, the fight is about culture. The saying, “Without corn, there is no country” (Sin maíz no hay país ), is a battle cry. It names a movement to preserve corn. These deep sentiments motivate prohibiting GMO corn. Maíz originated in Mexico centuries ago. It is present everywhere and always. Enjoyed simply in tacos, tamales, and other forms.

Maíz is sacred. The Mayan text Popul Vuh describes this as a creation story, told since 300 BCE. The Aztecs had multiple gods for maíz. Corn continues to feed daily dreams of Mexican food worldwide. Put simply, Mexican culture is maíz.

To preserve this, Mexico protects corn. Since 2013, it has been illegal to plant or sell GMO corn seeds because they alter gene-sequencing in non-GMO corn plants. Mexico is the world’s most diverse genetic archive for corn, with 59 distinct varieties. Millions see corn as a significant part of national culture and diets.

By outlawing GMO corn, Mexico secures safe supplies of white corn. Without it, there is no food security. Recent experiences with the pandemic, food price spikes and supply chain breakdowns add inspiration. The ban is a significant step, capitalizing on the production of non-GMO corn from Mexican and American farms.

Mexico will continue importing corn-based animal feed. The ban has no impact on this kind of corn, GMO and yellow and the overwhelming part of American exports.

In this duel, the U.S. and Mexico see different things when it comes to corn and maíz. The U.S. focuses on potential exports. Mexico worries about actual threats to its culture and security.

As it weighs in, Canada should remember its reasons to protect dairy farmers and consumers in the face of lower prices and oversupply from the U.S. Mexico faces the same, but with corn. Why favour Iowa corn farmers over Wisconsin dairy farmers?

For cynical reasons and not principled ones. In 1996, American officials said Canadian dairy protections threatened the “credibility” of North American free trade. Not really. Decades later, the countries share the “world’s largest and most comprehensive trading relationship.” Now, two CUSMA panels approved Canada’s supply management system for dairy. They show how trade agreements adapt.

Canada’s consistency in dairy and corn disputes would bolster the sustainability of trade rules. Otherwise, mounting food security threats will tear apart obligations for this young pact. Unable to adjust, the World Trade Organization and the European Union face these tensions.

CUSMA should avoid this. It can. One way is for Canada to listen to its own advice of prioritizing market stability when it comes to food security.

Ernesto Hernández-López is a professor of law at the Dale E. Fowler School of Law, Chapman University, in California. He writes about international trade law and agriculture.