Mexico Signals It May Allow Exceptions to US Corn-Import Ban

(Bloomberg) -- Mexican President Andres Manuel Lopez Obrador signaled he’s softening his stance on a planned ban of a type of US corn amid pressure from the US government.

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AMLO, as he’s also known, said Tuesday that he’s considering allowing imports of genetically-modified yellow corn for livestock feed. That’s a change in tone from previous government statements to phase out GMO corn by early 2024.

“Yes, there is pressure from foreign companies, from foreign governments,” Lopez Obrador said at his morning news conference on Tuesday. “We are looking at yellow corn for animal feed.” Most US corn exports to Mexico are yellow corn, primarily used as livestock feed, while Mexico grows its own white corn, used for tortillas and other dishes.

If Mexico follows through with AMLO’s latest comments on the corn dispute, it would provide relief for US farmers, as Mexico is their second-largest export market. The issue has mobilized President Joe Biden’s administration, as well as policymakers in key corn-growing states, including Senators Chuck Grassley and Joni Ernst from Iowa.

The US Department of Agriculture “will continue to engage in conversations with Mexican officials about the critical importance of the bilateral trade relationship,” a spokesperson said. USTR didn’t immediately respond to requests for comment on Lopez Obrador’s remarks.

US officials have flagged concern about the yellow corn ban across a series of meetings in recent months, including a meeting between US Trade Representative Katherine Tai and her Mexican counterpart earlier this month.

Along with cuts to US corn exports, the planned ban could increase the price of groceries in Mexico at a time when food inflation is running at 14%, the fastest in more than two decades, said Kenneth Smith Ramos, a longtime Mexico trade and agricultural negotiator. It also further strains the US-Mexico relationship, he said.

“Trying to restrict imports of GMO corn -- it’s really Mexico shooting itself in the foot,” said Smith Ramos, partner at consulting firm AGON, who previously led technical talks for the US Mexico Canada Agreement on trade under former president Enrique Pena Nieto.

Mexico Agriculture Minister Victor Villalobos has shown openness to finding a solution, according to people familiar with the talks, who asked not to be identified because they don’t have permission to speak publicly.

Meanwhile, Lopez Obrador has sent conflicting signals, saying as recently as last month that GMO yellow corn must be stopped to protect the health of the Mexican people. More broadly, he’s pushed to make Mexico self-sufficient in food and gasoline, a goal that he reiterated on Tuesday.

--With assistance from Nacha Cattan.

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