Mexico Threatens a Trade War With the U.S. and Canada

A ban on genetically modified corn would be catastrophic for North America

By Mary Anastasia O’Grady. Excerpts:

"According to a study released Sept. 19 by Virginia-based business management consultant World Perspectives Inc., the negative effects of a Mexican prohibition on GM corn would be devastating—at home and abroad. 

The study was done for a multinational group of food and agricultural interests, including Mexico’s National Agriculture Council and the Mexican Association of Food Producers. It found that over a “10-year forecast period, the Mexican ban on GM corn would cause the U.S. economy to lose $73.89 billion in economic output, and Gross Domestic Product (GDP) would contract by $30.55 billion.” In the first year of a ban, the U.S. corn industry alone would suffer a net loss of $3.56 billion, followed by a loss of $5.56 billion in the second year. More broadly, via a ripple effect, “the U.S. would lose 32,217 jobs annually with labor income falling $18.38 billion.”

The Canadian economy would also suffer, losing $92.85 million in economic output over 10 years. 

The ban would help producers of non-GM corn, as its price would go up 48% in the first year, the study finds. Over 10 years the non-GM corn price would increase 19%.

But most Mexicans would suffer mucho. Mexican GDP would shrink by $11.72 billion over 10 years, the study estimates, and output would fall by $19.39 billion. The harm would extend beyond agriculture with an expected annual loss of 56,958 jobs, reducing labor income $2.99 billion.

Mexican access to protein would be reduced, “due to a 13.7 percent increase in feed costs,” which would push up prices at the supermarket. A 66.7% spike in poultry prices would be hard on consumers, and eggs could “become a luxury item” for the poor.

Mexican consumers would likely opt for more-affordable imported meat and poultry raised on GM corn, damaging domestic livestock producers. There would also be a cost to the environment, according to the study, because “non-GM crop production forgoes the benefits of higher yields and reduced land use in addition to lower chemical applications and no-till practices that protect soils and lower carbon emissions.”"