Trade Panel Decision Against Mexico in CUSMA GM Corn Case Amid Ballooning Trade War
In 2019 the Mexican government announced its plans to transition away from the use of genetically modified (GM) corn and glyphosate-based herbicides in agriculture. This was part of a broader policy initiative aimed at promoting food sovereignty, protecting Indigenous agriculture and cultural heritage in native corn varieties, and addressing health concerns.
The decrees were modified in February 2023 to delay the phase-out of glyphosate and limit GM corn in flour and tortillas for direct human consumption. The decrees would also substitute the use of GM corn in industrial and animal feed.
The United States filed a formal dispute under the Canada-United States-Mexico Agreement (CUSMA) in August 2023. The dispute concerned Mexico’s compliance with the Sanitary and Phytosanitary Standards (SPS) provisions of the CUSMA. These measures incorporate the World Trade Organization’s SPS agreement.
SPS measures are defined broadly to include measures to protect animal or plant life or health or human or animal health under any relevant laws, decrees, regulations or other requirements (Article 9.1, Annex A, para 1). Article 9.6.3 of the CUSMA requires that the measure is “based on an assessment, as appropriate to the circumstances, of the risk to human, animal or plant life or health.” Article 9.6.8 provides that in conducting the risk assessment each party should take into account “the available relevant scientific evidence, including qualitative and quantitative data and information” and to take into account the World Trade Organization (WTO) SPS guidance and relevant international standards, guidelines and recommendations of the WTO. Article 9.6.7 requires that the risk assessment be documented. Article 9.6.6. requires that measures be based on relevant scientific principles. Chapter 9 also requires consultation. The case also turned on whether various exceptions to Chapter 9 applied. However, the focus of this case review is on Chapter 9.
The New Lede reported evidence of agrochemical lobbying that suggests that the initiation of the trade dispute was driven by chemical industry lobbyists. The United States raised arguments that international standards for biotechnology risk assessment were not followed. The US argued that the risk assessment conducted by Mexico in support of the ban on GM corn was not “appropriate”.
The agrochemical lobby has been pushing hard to leverage trade agreements and disputes to justify deregulation of biotechnology and agrochemicals. They advance a narrow interpretation of SPS agreements to set a high bar for precautionary regulation of agrochemicals and biotechnology.
Canada intervened before the CUSMA tribunal and largely backed the US position. They agreed that there was a close relationship between the obligation to apply SPS measures “only to the extent necessary to protect human life or health” and the “obligation to ensure that SPS measures are not more trade restrictive than required.” Canada also suggested that a zero-risk level of protection was not “sufficiently precise”. Canada took the position that there was “no credible scientific evidence establishing any health risks posed by consumption of GM corn in dough and tortillas.”
Although Canada does not export any significant amount of corn to Mexico, Canada’s intervention comes in the context of Canadian exports of GM canola to Mexico.
Before the CUSMA tribunal, Mexico argued that Food and Agriculture Organization standards, and other international standards, guidelines and recommendations did not meet its appropriate level of protection (Panel decision, para 122). Mexico argued, that it was entitled to set the level of protection at zero (Panel decision, para 140). Mexico argued that the Food and Agriculture Organization (FAO) assessment in the CODEX did not address cumulative risks arising from dietary exposure to glyphosate and transgenic protein residues (para 141) and pointed out the absence of food residue limits for relevant foods. For example, Mexico argued that GM corn would contain unknown total amounts and combinations of transgenic proteins and pesticide residues. The risk to human health arising under these conditions would be multiplied by the large amount of tortillas and similar foods consumed each day over the long term. (para 142).
Mexico relied on a “dossier” (200-page risk assessment, with 1200 references) conducted by Mexican regulatory agencies. This work highlighted a 2017 study documenting the presence of transgenic material in 82% of tortillas. The Dossier also canvassed glyphosate risks associated with the use of GM corn extensively. Mexico’s proposed glyphosate restrictions were not challenged by the US before the CUSMA tribunal.
Mexico also questioned the “substantial equivalence” of GM corn as a regulatory mechanism used in the US, alleging that this regulatory process does not adequately address the potential metabolic risks of transgenics. This regulatory mechanism was adopted in the US in 2020 to streamline the development of GM plants. Substantial equivalence allows a GM crop to be authorized based on similarity to conventional varieties, and based on voluntary consultation with the US Food and Drug Administration. Similar deregulatory proposals have also been adopted in Canada.
In December of 2024, the Panel of arbitrators under the CUSMA ruled against Mexico. At paragraphs 195-196 of the Panel decision, the Panel critiques the Mexican risk assessment document as lacking transparency in which experts participated, the methods used and did not grapple with contradictory prior analyses, accepting a characterization of it as “a collection of materials with out any analysis of their contents.”
The Panel found that Mexico did not meet the requirements of Chapter 9 of the CUSMA and that the measures were not sufficiently tailored to achieve the level of protection required. The panel’s decision highlighted that the measures were not based on/did not take account of relevant international standards, guidelines or recommendations or on an assessment “appropriate to the circumstances” and that the other CUSMA parties did not have an opportunity to comment. The Panel also held that the assessment was not based on relevant scientific principles.
The Panel decision also offered Mexico a path forward to try to justify its policies under the CUSMA. The Panel limited the remedy for Mexico’s violations of the USMCA to a recommendation that Mexico conduct a risk assessment to support its measures.
The Panel accepted that Mexico has the right to set the “Appropriate Level of Protection” (ALOP) under Chapter 9 at zero risk, a finding which has potential significance for future trade disputes. However, according to the Panel, Mexico’s measures violated the CUSMA because it did not carry out a “formal risk assessment,” and because according to the panel, the measures chosen by Mexico to implement the ALOP were ineffective and overbroad.
On Feb 6, 2025 Mexico announced that it would withdraw the restrictions on GM corn for human consumption and the directive to gradually eliminate imports of GM corn for animal feed and other uses. The United States has since escalated tariffs and threats of 25% tariffs on Mexican goods, raising questions about whether trade fairness is truly a motivating factor.
Mexico’s response also included a recent constitutional amendment (March 17, 2025) to ban the domestic cultivation of GM Corn. The USDA has suggested that the amendment is “ambiguous” on the scope of the ban with respect to corn grain imported for food or feed use. Of course these developments are also occurring in the context of a broadening trade dispute with the US.
Canada needs to urgently re-commit itself to precautionary regulation of the food system, and its positions in trade disputes – and solutions to those trade disputes - need to align with this commitment. It is disappointing to see Canada using its position under agreements like the CUSMA to undermine precautionary regulation of biotechnology and agrochemicals in other countries. Canada’s position will ultimately serve to limit precautionary regulation in Canada as well, potentially putting the health and environment of people in Canada at risk.
Risk assessment is ultimately a value-laden exercise about the level of potential harm and scientific uncertainty that will be tolerated. Because of this countries need to have some measure of discretion over the appropriate level of protection and the extent to which harm must be “proven” before regulating. The Panel decision, while supporting discretion over the appropriate level of protection, signals a high bar for risk analysis. The result is that this will raise the expense of (and delays in) precautionary regulation. The real beneficiaries of the decision are agrochemical companies, which can use their vast resources to overwhelm precautionary regulatory systems with these requirements.
More information on the US trade dispute with Mexico is located on the website for the US right to know.
Laura Bowman is a Staff Lawyer is Ecojustice Canada.