By Eduardo García.

Mexico is expected to lose a USMCA challenge against its ban on genetically modified (GM) corn imports for human consumption. If upheld, Mexico will need to lift the ban or face compensatory tariffs to offset U.S. exporters’ losses. The outcome, and Mexico’s response to it, will also test President Claudia Sheinbaum’s ability to defend Morena’s domestic agenda amid growing US trade protectionism.

However, Mexico’s Economy Minister, Marcelo Ebrard, recently clarified that the panel’s review process—initiated in August 2023 after unsuccessful bilateral consultations—has not yet concluded. Ebrard stated that Mexico has formally appealed the preliminary decision. He expressed optimism that additional arguments submitted this month could sway a final ruling, expected on December 14.

Regardless of the outcome, many experts believe that Sheinbaum is unlikely to reverse Mexico’s stance on GM corn for human consumption. Analysts anticipate that she may accept the punitive tariffs the US could impose on certain Mexican exports rather than lift the prohibition. Mexico doesn’t import much U.S. corn for direct human consumption. Sheinbaum’s team likely think this will dilute the economic impact of any potential trade penalties.

“Mexico’s restrictions barely affect US corn exports and. . . [they are] very popular with the public,” said Timothy Wise, a senior research fellow at the Global Development and Environment Institute at Tufts University, to the news site Politico. “No one in Mexico wants to be eating GM tortillas, and I seriously doubt the government will abandon its policies.”

Should Sheinbaum decide to absorb the penalty rather than comply, her stance could strain Mexico-U.S. relations. During his campaign, President-elect Donald J. Trump warned of potential high tariffs on Mexican exports and even hinted at leaving the US-Mexico-Canada Agreement (USMCA) unless Mexico cooperates on various issues, including drug trafficking and immigration controls.

Trump’s threats may be a negotiating tactic for the 2026 USMCA review. But Mexico’s choice to ignore an official ruling could further complicate bilateral trade, posing unforeseen challenges to Sheinbaum’s administration.

Still, Rosendo Gutiérrez, Undersecretary of Foreign Trade at the Ministry of Economy, told the newspaper El Economista that Mexico will respect the panel’s final ruling. Doing so would avoid a confrontation with the US government over a relatively minor issue. This approach is particularly important as Mexico, the US, and Canada prepare to begin the review process for the United States-Mexico-Canada Agreement (USMCA), with negotiations expected to conclude by 2026.

Sheinbaum inherited the dispute from her predecessor, President Andrés Manuel López Obrador, who enacted the GM corn ban in February of last year. She, however, has endorsed it and has said that science backs Mexico’s position. While the initial policy sought to ban all GM corn imports, it was later adjusted to focus on corn intended only for human use, allowing GM corn imports for animal feed.

These policy adjustments, however, did not satisfy US officials, who in March requested technical consultations. After two rounds of discussions failed to yield a solution, the US requested the establishment of a three-member panel to adjudicate the matter under Chapter 31 of USMCA.

The panel, composed of Christian Häberli from Switzerland, Hugo Perezcano Díaz from Mexico, and Jean E. Kalicki from the US, recently accepted comments from various non-governmental organisations to consider broader environmental and health perspectives. The panel’s forthcoming decision will be closely watched, as it could set important precedents for future trade and biotechnology policies within North America.