What is in this article?:
- Mexico's government in transition phase
- Biotech policy
- The Mexican government has allowed the importing of biotech corn and soybeans since 1996, the first year they were grown in the U.S., but have not allowed them to be grown in Mexico.
The Mexican government has allowed the importing of biotech corn and soybeans since 1996, the first year they were grown in the U.S., but have not allowed them to be grown in Mexico. This policy inconsistency has led to market uncertainties. In early June the government announced the commercialization of biotech soybean on 625,000 acres in seven states; current plantings are about 400,000 acres per year. The herbicide tolerant plants are expected to provide better weed control and higher yields, which should increase acreage. About 90 percent of the soybeans consumed in Mexico come from the U.S. and over 90 percent of those are biotech.
In late June the government followed up with an announcement of three pilot permits to grow biotech corn on 2,500 acres in the state of Tamaulipas. Some of the corn will be herbicide tolerant and others will be insect resistant. This is the third year of movement beyond the experimental stage for corn, but the first year for large scale pilot permits. The next stage is commercialization. Since PRI governments first approved the consumption of biotech crops, President-elect Nieto is expected to be supportive of the changes.
Other trade policy issues could gain traction at any time. U.S. mandatory-country-of-origin-labeling for beef and pork is an active issue for which the U.S. government is seeking a solution. The cross border, long-haul trucking program under NAFTA could become an issue again. Unexpected sugar sales from Mexico into the U.S. market could create supply and demand imbalances. Pork imports have been an issue in previous years.
In addition to achieving strong economic growth, President-elect Nieto has to keep food prices reasonable for the growing middle class while maintaining support for small farmers. Current President Calderon and his predecessor President Fox, both of the National Action Party, saw the need to have imports from the U.S. and other countries to contain food price increases. The previous presidents from the PRI also recognized that need and supported NAFTA that came into force in 1994.
All three candidates promised to do more for farmers in the countryside. The PRI and President-elect Nieto were seen as the party of the middle that would balance the needs of rural areas and the large urban centers. He does not have to choose one over the other. If the economy grows 4-6 percent per year, strong consumer demand will continue the pattern under NAFTA of increasing domestic production and imports to feed a growing middle class.
Ross Korves is an Economic Policy Analyst with Truth About Trade and Technology