Mexico slaps new tariffs on white corn to support domestic producers

21 Jun 2023 --- Mexican president, Andrés Manuel López Obrador, has announced his intentions to enforce tariffs and avoid imports of white corn. Furthermore, in an open trade dispute with the US and Canada, the government will continue its fight against genetically modified (GMO) foods.

New tariffs will apply to grain imports from countries without trade deals with Mexico.

Obrador also plans tosign an agreement this week with tortilla bakers only to use non-GMO white corn.

The restrictions on imports come after the Mexican government introduced a 50% tariff on white corn exports in January to keep tortilla prices down and keep grain in the country. Corn is a staple food in Mexican diets and an important source of calories, with a per capita consumption of 332 kg per year.

US and Canada defend GMOs
In 2020 Obrador announced Mexico would phase out GMO corn by 2024. 

If implemented, the ban would hinder US corn exports to the country, which in 2022 totaled US$4.92 billion, being the second largest market for the US last year, according to the USDA.

Currently, over 90% of corn acreage in the US is planted with genetically engineered seeds. This month, the US and Canada have initiated the “controversy-solving” procedure under the US-Mexico-Canada Agreement of free trade to solve the dispute. 

The US and Canada argue that Mexico’s decision to ban GMOs is not “backed by science.”

Protectionist moves missed targets
This is the third Mexican government direct intervention in the tortilla market since October when in coordination with most of Mexico’s major food producers, the country temporarily halted all their white corn exports. 

The nation’s target at the time was a 3% reduction in corn prices between October 2022 and February 2023. 

However, February ended with corn averaging MXN 22.22 per kg (US$1.29), compared to MXN 21.72 (US$1.26) at the start of October, missing the government target, according to National System of Information and Market Integration data.

Prices are now at MXN 22.7 (US$1.32), and the new import tariffs might reduce the availability of corn and further push up prices.  

By Marc Cervera