April 22, 2021

U.S. Agricultural Producers Address Concern as to Declining Trade with Mexico

By Fernando Schoeneck

On March 22, 2021, twenty-seven of the leading associations of agricultural producers in the United States, including the American Farm Bureau Federation, the American Feed Industry Association and the American Seed Trade Associationsent a letter to the U.S. Department of Agriculture Secretary, Thomas Vilsack and the U.S. Trade Representative, Katherine Tai, addressing their concerns as to the declining U.S.-Mexico food and agricultural trade relationship, urgently requesting their attention to this critical issue. 

Below is a selection of leading concerns in such trade relationship as highlighted in the letter:

1.         Glyphosate/GM Corn Ban.  The Mexican Presidential decree published in the Official Journal of the Federation on December 31, 2020 (the “Decree”) states the intent and course of action to be taken the by the Mexican government to gradually phase out the use, distribution and importation of glyphosate and genetically modified (GM) corn for human consumption.  The Decree establishes a transition period to achieve the total replacement of glyphosate, which period began on January 1, 2021 and will end on January 31, 2024.  While the Decree is considered to be unclear and vague in its scope, it has created uncertainty and risk for the U.S-Mexico trade of corn and corn products with the potential to negatively impact a considerable amount of U.S. agricultural exports bearing in mind that Mexico is the largest importer of corn products from the U.S.

2.         Front of Pack (FOP) Labeling (NOM-051).  Mexican Official Rule NOM-051-SCFI/SSA1-2010 establishes new general labeling requirements for food and prepackaged non-alcoholic beverages that must warn consumers when calories, total sugar, saturated fat, trans fat and/or sodium amounts exceed intake recommendations. Such warning labels must be in the form of black octagons resembling stop signs. The overarching concern among U.S. agricultural producers is that this labeling requirement seemingly lacks solid scientific support and appears to be more of a campaign by the Mexican government to attempt to restrict food and agricultural imports from the United States by branding such as potentially prejudicial for the health of Mexican consumers.

3.         Biotechnology Approvals.  In addition to the Decree referenced above, there is a sense that the Mexican government has created uncertainty regarding the approval of agricultural biotechnology considering that since May 2018, review and approval of applications filed for biotechnology permits in Mexico has stopped. As a result, Mexico has become a barrier for the launching of new biotechnology products in North America, potentially restricting access to new technologies that would help to address critical matters such as sustainability and climate change by farmers in such region.

4.         Organic Export Certification Requirement.   As of December 28, 2020, Mexico’s Health, Safety and Quality Agency (SENASICA for its Spanish acronym) required that all U.S. organic exports be certified in accordance with Mexico’s Organic Standards Law.  Nevertheless, this requirement was not notified to the World Trade Organization or formally notified to the U.S. government.  It is important to note that prior to this, any U.S. organic product certified by the United States Department of Agriculture (USDA) could be exported to Mexico and sold without any additional certification. As a result of efforts by the USDA and U.S. Trade Representative, the deadline to comply with such certification has been extended to June 26, 2021.  Nevertheless, it is considered that this is not enough time for its proper implementation and if enforced, U.S. organic producers are likely to experience significant interruptions to trade given that the certification process might take a year or more under the new organic standard, resulting in an increase in exportation costs to Mexico. Furthermore, SENASICA has not provided any clarity regarding which specific products must be certified and whether such certification process will include all organic products or only a select group.

The challenges faced by farmers, ranchers, producers and workers in the U.S.-Mexico food and agricultural trade relationship require action by both the U.S. and Mexico.  If you need any help understanding the legal implications of the gradual glyphosate/GM corn ban, FOP labeling requirements or organic export certification requirements, please contact us.