The ongoing dispute between the United States and Mexico over Mexican limits on genetically modified (GM) corn has escalated, with the US government formally requesting a dispute settlement panel. In response, Mexico's Economy Department has stated that it will defend its position. According to Mexico, the measures in question have no impact on trade and therefore do not violate the United States-Mexico-Canada free trade agreement, known as USMCA.

The US Trade Representative's Office has objected to Mexico's ban on GM corn for human consumption and its plans to eventually ban it for animal feed. The USTR argues that Mexico's measures are not based on scientific evidence and undermine the market access it agreed to provide under the USMCA. A panel of experts will now be selected and given approximately six months to study the complaint and release its findings. If Mexico is found to have violated the trade agreement, trade sanctions could follow.

In June, the US government announced that talks with Mexico on the issue had failed to yield results. Mexico's goal is to ban biotech corn for human consumption and potentially for animal feed as well, a move that the US and Canada believe would harm trade and violate USMCA requirements for health and safety standards to be based on scientific evidence. Mexico is the largest importer of US yellow corn, most of which is genetically modified and used as feed for livestock. While corn for human consumption in Mexico is mainly domestically grown white corn, processed products could potentially contain GM corn.

Mexico argues that biotech corn may have health effects, even when used as fodder, but has not presented evidence to support this claim. In February, Mexico's Economy Department issued new rules stating that it will gradually substitute GM feed and milled corn, but did not specify a timeline for doing so. This has raised concerns among US growers, as a potential ban on GM feed corn could cause meat prices to soar in Mexico, where inflation is already high.

The US is concerned about the potential loss of its largest export market for corn, with Mexico annually purchasing around $3 billion worth of GM feed corn from the US. The escalating dispute over genetically modified corn imports has led the US to request a dispute settlement panel under the USMCA. If the panel rules in favor of the US and Mexico fails to comply, the USTR would have the authority to impose punitive tariffs on Mexican goods, potentially sparking a trade war in North America.