Back in the 1990s, an important area of the trade policy debate was about how WTO rules might interfere with domestic environmental, food safety, and other public policy measures. There were cases such as Shrimp/Turtle, with a number of countries challenging a U.S. environmental measure; and EC - Hormones, with Canada and the U.S. challenging an EC ban on hormone-treated beef. This led to colorful protests at WTO meetings such as the 1999 Ministerial Conference in Seattle, as NGOs pressed for more regulatory autonomy/sovereignty.
That debate still exists to some extent today, but it has been eclipsed by the push in the U.S. for a broader economic nationalism. This push started with Trump but has continued under Biden. I think it's fair to say that the Biden administration has been more worried about the impact of trade liberalization on certain U.S. industries than on getting more market access for U.S. producers through, for example, new tariff-reducing FTAs or Hormones-style legal complaints -- or EC - Biotech-style if you go to the 2000s -- about foreign government import restrictions that are not based on science.
But last week, USTR dusted off the old playbook and filed a complaint against Mexico under the USMCA, challenging a Mexican ban on imports of genetically engineered corn:
Pursuant to Articles 31.2 and 31.4 of the United States-Mexico-Canada Agreement (“USMCA”), the United States requests consultations with Mexico with regard to certain Mexican measures concerning genetically engineered (“GE”) corn and other GE products. These measures appear to be inconsistent with several provisions of the USMCA, including under Chapter 9 (Sanitary and Phytosanitary Measures) and Chapter 2 (National Treatment and Market Access for Goods).
There were claims against three specific measures, one of which was as follows:
2. On February 13, 2023, Mexico issued the Decree Establishing Various Actions Regarding Glyphosate and Genetically Modified Corn (“2023 Corn Decree”). The decree provides for an immediate ban on GE corn for nixtamalization or flour production. This ban on GE corn for nixtamalization or flour production is reflected in the 2023 Corn Decree4 and in Mexico’s legal regime governing the importation and sale of GE products other than for cultivation.5 This measure (the “Tortilla Corn Ban”) appears to be inconsistent with the following provisions of the USMCA:6
a. Article 9.6.3 because Mexico does not base its measure on relevant international standards, guidelines, or recommendations or on an appropriate risk assessment;
b. Article 9.6.6(a) because Mexico does not ensure its measure is applied only to the extent necessary to protect human, animal, or plant life or health;
c. Article 9.6.6(b) because Mexico does not ensure its measure is based on relevant scientific principles, taking into account relevant factors;
d. To the extent Mexico has conducted a risk assessment, Article 9.6.7 because Mexico did not conduct its risk assessment with respect to an SPS regulation in a manner that is documented and provides the other Parties an opportunity to comment;
e. To the extent Mexico has conducted a risk assessment, Article 9.6.8 because Mexico has not ensured that each risk assessment it conducts is appropriate to the circumstances and takes into account relevant guidance of the WTO SPS Committee and relevant international standards, guidelines, and recommendations;
f. Article 9.6.10 because Mexico did not select an SPS measure not more trade restrictive than required to achieve the level of protection that the Party has determined to be appropriate; and
g. Article 2.11 because Mexico adopts or maintains a prohibition or restriction on the importation of a good of another Party.
I feel like this complaint goes against the general thrust of what the Biden administration has been trying to do on trade. So why bring this complaint now? It may be that pressure from Congress and industry was a big factor. The executive branch is always going to have to make some concessions to these sorts of demands. In addition, while this is a bit speculative, there are several disputes going on with Mexico under the USMCA right now (auto rules of origin, energy), and perhaps USTR saw this as a way to create more negotiating leverage.
If we do get to a panel in this case, it will be interesting to see how heavily it draws on WTO jurisprudence under the SPS Agreement and GATT Article XX. There are a lot of cases to cite to on these issues, and presumably one or both parties will do some citing. The SPS provisions may be slightly different under USMCA than at the WTO, but with regard to the USMCA Article 2.11 claim noted above, I assume Mexico will invoke USMCA Article 32.1, which incorporates GATT Article XX directly.
As a final point, SPS disputes are complicated, often involving consultations with scientific experts. I wonder if a panel in this case will be able to meet the tight USMCA deadlines or instead will ask the parties to agree to an extension.
