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"U.S. agribusiness exporters, the biotech industry, and their allies in Congress are pushing this case, intent on compelling Mexico to accept U.S. exports without debate," said one expert.
After two-and-a-half months of failed negotiations, the U.S. government on Thursday intensified its effort to quash Mexico's limits on genetically modified corn imports by calling for the formation of a dispute settlement panel under a North American trade deal.
In a 2020 decree backed by agricultural, consumer, environmental, public health, and worker groups, Mexican President Andrés Manuel López Obrador (AMLO) announced plans to phase out genetically modified (GM) corn and the herbicide glyphosate by January 2024.
Under pressure from the U.S. government and impacted industries, he issued a new decree in February reiterating plans to block GM corn imports for human consumption by then but lifting the deadline for imports intended for livestock feed and industrial use.
"The Mexican government will show what has occurred: Its cherished tortillas are being contaminated with glyphosate and GM corn. And they intend to put a stop to that."
While AMLO's move was seen as a concession to the U.S. and lobbyists challenging his policies, the Biden administration in June still requested 75 days of formal negotiations. After talks ended Wednesday, U.S. Trade Representative (USTR) Katherine Tai confirmed the decision to form a panel under the United States-Mexico-Canada Agreement (USMCA).
"Through the USMCA dispute panel, we seek to resolve our concerns and help ensure consumers can continue to access safe and affordable food and agricultural products," Tai said Thursday. "It is critical that Mexico eliminate its USMCA-inconsistent biotechnology measures so that American farmers can continue to access the Mexican market and use innovative tools to respond to climate and food security challenges. Our bilateral relationship with Mexico, one of our oldest and strongest trading partners, is rooted in trust and honesty, and there are many areas where we will continue to cooperate and work together."
U.S. Agriculture Secretary Tom Vilsack similarly said that "Mexico's approach to biotechnology is not based on science" and "the United States is continuing to exercise its rights under the USMCA to ensure that U.S. producers and exporters have full and fair access to the Mexican market."
The Mexican Ministry of Economy responded in a statement that "Mexico does not agree with the position of the United States" and "is prepared to defend the Mexican position before this international panel and demonstrate: 1) that the national regulation is consistent with the commitments signed in the treaty; and 2) that the challenged measures do not have commercial effects."
The Institute for Agriculture and Trade Policy (IATP) has previously supported Mexico's efforts to phase out GM corn and glyphosate and on Thursday challenged claims by U.S. officials and agribusiness about Mexican obligations under the treaty and the potential economic impact of the policies.
"U.S. agribusiness exporters, the biotech industry, and their allies in Congress are pushing this case, intent on compelling Mexico to accept U.S. exports without debate. It is an assault on Mexico's food sovereignty," said Karen Hansen-Kuhn, IATP director of trade and international strategies. "Trade rules should provide a forum to protect and advance rights, rather than block them."
Hansen-Kuhn on Thursday authored an op-ed about Mexico's rights under the USMCA while ITAP senior adviser Timothy A. Wise wrote about "exaggerated claims of economic damage" that "sprang from a convenient set of assumptions, all of which are flawed and now outdated in light of the more recent presidential decree."
"As Mexican Economy Minister Raquel Buenrostro stated in response to the USTR request for technical consultations, Mexico's decree is based on science, and she will challenge the U.S. government in the consultations to show 'quantitatively, with numbers, something that has not occurred: that the corn decree has commercially affected U.S. exporters,'" Wise also said.
"The Mexican government will show what has occurred: Its cherished tortillas are being contaminated with glyphosate and GM corn," he continued. "And they intend to put a stop to that."
As Reutersdetailed Thursday:
Under USMCA's dispute settlement rules, a five-person panel, chosen from a roster of pre-approved experts, must be convened within 30 days, with a chair jointly chosen and the U.S. side choosing two Mexican panelists and Mexico choosing two American panelists. The panel will review testimony and written submissions and its initial report is due 150 days after the panel is convened.
Previous USMCA dispute panels last year ruled in the U.S.'s favor in a dispute over Canadian dairy quotas, and against the U.S. on automotive rules of origin, siding with Mexico and Canada.
There have been other disagreements between the U.S. and Mexico, most notably over energy in which the U.S. has argued that Mexico's nationalist policy prejudices foreign companies.
Arturo Sarukhán, a former Mexican ambassador to the United States, said on social media Thursday that "of the two consultation processes—energy and yellow corn—this is the one that is politically most relevant for the White House in 2024," given the significance of agricultural states such as Michigan, Minnesota, and Wisconsin to Democratic U.S. President Joe Biden, who is seeking reelection, and the GOP nominee, which could be former President Donald Trump, who signed the USMCA.
In the last two years, food corporations paid shareholders $53.5bn while millions went hungry.
Imagine being able to provide food, shelter, medicine and clean drinking water for the 230 million most vulnerable people on Earth, and still having a cool $2bn in spare change. That’s the equivalent of the entire economic output of Gambia rattling around in your pocket.
The reason for this unlikely thought experiment is a new analysis showing that 20 of the world’s biggest food corporations – the largest in the grain, fertiliser, meat and dairy sectors – returned a total of $53.5bn to their shareholders in the last two financial years.
To put that into perspective, the UN estimates that it needs $51.5bn to provide life-saving support to 230 million people deemed most at risk worldwide. You get the idea.
What’s more, the corporations ‘earned’ these profits during a period of unprecedented turmoil – a global pandemic and full-scale war in Ukraine – when global supply chains were disrupted and millions of people went hungry.
While readers in wealthier countries may have noticed higher prices for the weekly shop, the impact in developing countries has been devastating. Food prices rose by between 3% and 4.5% in the UK, Canada and the US in the first few months of the pandemic – but by 47% in Venezuela.
The World Food Programme estimates that the number of people facing acute food insecurity more than doubled from 135 million people before the pandemic to 345 million. Countries in the Horn of Africa as well as Afghanistan and Yemen have been particularly badly hit.
Owning the market
So how were 20 companies able to get their hands on this amount of money amid two major crises?
By literally owning the market. The new report from Greenpeace International shows how this small group of companies are able to wield wildly disproportionate control, not only over the supply chains for food itself, but over information about those supplies.
When supply chains were disrupted and food prices rose, the profits rolled in. Cash dividends and shareholder buyback programmes allowed them to transfer an astronomical amount of money to their shareholders, while further amplifying their power over the sector’s industry and governments.
A systemic failure of public policy has allowed a select group to record huge profits, enriching the individuals that own and operate them and transferring wealth to shareholders, most of whom are in the Global North.
Let’s take one example from the report: Russia’s latest invasion of Ukraine last year also resulted in steep price rises for agricultural commodities such as wheat, maize, sunflower oil and some fertilisers, of which Ukraine and Russia are major exporters.
Just four companies – Archer-Daniels Midland, Bunge, Cargill and Dreyfus – control up to 90% of the world’s grain trade. They are under no obligation to disclose what they know about global markets, including their own grain stocks. This lack of transparency means that these companies withhold information that can shape grain prices according to their needs – not even hedge funds can get information except directly from them.
Our report finds that following Russia’s invasion of Ukraine, opacity around the true amounts of grain in storage was a factor in the development of a speculative bubble that led to grain prices rising around the world. In the last two financial years, these four companies paid out a total of $2.7bn in cash dividends, and at least $3.3m in share buybacks, though the true figure is likely much higher because not all of them report on their finances in detail.
If we want to see a world without hunger, the most impactful structural change we can make to the global food system is to bring about food sovereignty. This means policymakers empowering consumers and food producers through policies that benefit local food production, the environment and workers’ rights.
For years, food sovereignty movements have sought to return autonomy to food producers, shortening and strengthening supply chains to reverse the damage done by unsustainable farming. It is not just wishful thinking: from Papua New Guinea to Brazil to Mexico and many other countries, there are deep structural movements working to bring food to everyone’s plate.
But there must also be policies to loosen the grip of corporate control on the global food system – measures such as regulations to ensure greater transparency, an ambitious and sector-wide windfall tax, and significant taxation on dividend payouts as well as on income from dividends.
Achieving zero hunger is the second of the Sustainable Development Goals that UN member states committed to reach by 2030. Recent UN conferences, such as COP27 and COP15, have highlighted industrial agriculture as an important driver of greenhouse gas emissions and biodiversity loss.
It is time for food to be seen as what it is: a basic human need that has to be available to us all, and not another commodity to be exploited and traded for the profit of the few.
It's necessary to "degrow" the "corporate food regime" that over last five decades has impoverished the climate, water resources, local communities and crop diversity, and has not solved the problem of hunger.
This was the argument made by Eric Holt-Gimenez, Executive Director of Food First, an organization whose mission is to work towards ending hunger by bringing about food justice, at a presentation Friday at the Fourth International Conference on Degrowth for Ecological Sustainability and Social Equity, which took place in Leipzig, Germany.
Holt-Gimenez made his address via video during a session entitled "The food challenge. Struggling for just and ecological food systems."
The food sector has been growth-focused, but this has not stopped the problem of hunger, Holt-Gimenez said, pointing the example of 2008, which was a year of record harvests and record profits for agricultural giants like Cargill and ADM amidst record hunger.
"Clearly, something has to change, and simply growing more food isn't going to solve the problem of hunger," he said. "This contradiction runs even deeper when we realize that most of the hungry people in the world are farmers. They're peasant farmers," most of whom are women, he added.
Yet "peasant farmers produce most of the food in the world -- and they do it on less than a quarter of the agricultural land on the planet."
"So there's a tremendous amount of inequity bound up in the food system which creates poverty and in turn creates hunger even in a world of abundance."
Yet institutions of power repeat the claim that the amount of food the wold produces must double by 2015, Holt-Gimenez said. "This is simply part of productivist ideology of an extractive and regressive food system -- regressive in that it does not redistribute the wealth within the food system, but it concentrates the wealth in fewer and fewer hands. "
Degrowth, however, has gripped the food system as well, he said, because as big farms are getting bigger, small farms are getting smaller. Despite this, small farms continue to be more productive than their bigger counterparts.
So what will it take for degrowth to occur in the right way in the food system? That will require food sovereignty, a system that is local, redistributive and adheres to agro-ecological principles, he said.
That's a food system that stands in contrast to the chemical-dependent system introduced in the so-called Green Revolution and trade policies like NAFTA, but is one that ensures access to land and an "end to corporate monopoly rule."
"Clearly, we need to degrow corporate power," he said. "Clearly, this means a complete transformation of the corporate food regime."
We need "reforms that transform" the current capitalist food system, and that will take alliance building between progressives and radicals to make a strong enough movement to bring about such reforms, he said.
To see Holt-Gimenez's full remarks as well as those by the other panelists, watch the video below uploaded by Rosa-Luxemburg-Stiftung:
The food challenge. Struggling for just and ecological food systemsDegrowth 2014, Day 4: «Visions and strategies for the transformation» 5.9.2014, 14:30h (recorded livestream) Speakers: Eric ...