An Integrated Market

There is significant market integration between the US and Mexico in the agricultural sector, which is a similar but distinct form of integration to what we observe in the manufacturing sector through nearshoring under the USMCA framework. Interestingly, the US and Mexico compete and complement each other in the agricultural and food-related markets. The dominance of the US and Mexico as major exporters of certain agricultural goods results from a comparative advantage created not only by climate but also by other factors, such as land and labor endowments and technological innovation.

Image Credit

Luisa Blanco

Figure 1 presents the trend in US agricultural and related product exports for the top three importers. For the last ten years, Canada, Mexico, and China have been the top destinations for US agricultural and related products. In 2024, Mexico became the second-largest importer of US agricultural goods after Canada.

Image Credit

Luisa Blanco. Source: US Census Bureau. (n.d.). USA Trade Online. US Department of Commerce. 

https://usatradeonline.census.gov/buildReport     

In the other direction, Figure 2 shows Mexico’s share of total US imports of agricultural products for the eight top categories imported from Mexico. For imported agricultural products relevant to US consumers, such as berries, avocados, and tomatoes, Mexico’s share of US total imports represents 81-100 percent. Other relevant categories of agricultural products imported from Mexico include tequila (100-percent), beer (86-percent), and onions (48-percent). 

Image Credit

Luisa Blanco. Source: United States Department of Agriculture, Foreign Agricultural Service. (n.d.). Global Agricultural Trade System (GATS): Express query. https://apps.fas.usda.gov/gats/default.aspx 

Figure 3 helps us better visualize the integration of agricultural trade, showing the top eight categories of agricultural and related products in US exports and imports in relation to Mexico in 2025. Corn is the top category of US exports to Mexico, followed by pork and pork-related products, and dairy. On the other hand, fresh fruits, fresh vegetables, and beer are the top three categories of US imports from Mexico. We elaborate next on the importance of the trade relationship between the US and Mexico for corn and current policy issues relevant to the USMCA.

A Brief Overview of US–Mexico Corn Trade

The US is the top producer of corn, accounting for 33-percent of world production in 2025, followed by China and Brazil at 23-percent and 11-percent, respectively. On the other hand, Mexico is the top importer of corn, representing 14-percent of world imports, followed by the European Union (9-percent) and Japan (8-percent). The geographic concentration of corn production is the Midwest of the US, where the top four states that produce 52-percent of US corn are Iowa, Illinois, Nebraska, and Minnesota. US corn is transported to Mexico via rail across the northern border and by vessel from Gulf ports to Mexican ports.

When examining US corn exports to Mexico, it is important to distinguish between yellow and white corn. The US primarily exports yellow corn to Mexico, where it is used for animal feed. White corn, on the other hand, which is primarily used for human consumption in Mexico, is produced domestically. The dominance of the US as a major source of yellow corn for Mexico dates back more than four decades and predates NAFTA negotiations. Mexico's US corn imports between 1995 and 2000 grew in value by 49-percent. NAFTA facilitated US corn exports to Mexico by establishing a tariff-rate quota from 1994 to 2007 and allowing the goods to enter Mexico duty-free in 2008. The USMCA allows this product to enter the Mexican market tariff-free. The increase in demand for American corn in Mexico can be explained not only by NAFTA but also by other factors such as changes to domestic corn policy in Mexico and the US, and macroeconomic and structural changes and shocks in Mexico that lead to an increase in consumption of corn and a decrease in domestic production of corn.

The US-Mexico trade of corn has been a complex issue since the late 1990s. In 1998 Mexico accused the US of dumping high-fructose corn syrup into the market, but it lost the case at the WTO. In April of 2020, Mexico passed legislation to protect Mexican native corn, which specifically relates to white corn production, and to establish this corn as the primary source of human consumption with the goal of preserving       its cultural heritage. Then, by December of 2020, a federal government decree stated that the Mexican government should work towards reducing imports and consumption of genetically modified (GM) corn by 2024, which directly affected US yellow corn exports to this country.

As the deadline approached, a new decree was issued in February 2023 to replace the December 2020 decree, with four main goals. First, it stated that genetically modified (GM) corn cannot be used for masa and tortillas.^[1] Second, government agencies should continue the gradual substitution of GM corn for animal feed and industrial uses in human food. There was no specific deadline for this process in this decree, as there was in the 2020 decree. Third, it continues with the prohibition of planting GM corn seed in the country. Fourth, it required the substitution of Glyphosate herbicide by March 2024.

Corn and the Current USMCA Review

Agriculture is part of the current agenda for the USMCA review and has been discussed in previous rounds of negotiations due to its importance for both countries. For the US, Mexico is an important buyer of American corn, importing about one-third of total US corn exports to the world in 2025. For Mexico, corn is important for its cultural heritage and its relevance for the average consumer’s diet. After the 2023 Mexican decree on corn usage, the US requested to consult with Mexico, making the case that this decree violated the rules of USMCA. The US submitted a report in October of 2023 stating its complaint against the decree, arguing that scientific evidence confirms the safety of GM corn for human and animal consumption.

To manage the corn trade dispute, a three-person dispute panel was created to hold a hearing in June of 2024 and provide a final report in December of 2024. Mexico provided the panel with a written document in January 2024, arguing that the decree's objectives were to protect human health and native corn, and that this measure could be justified under the USMCA by aiming to conserve the biodiversity of native Mexican corn varieties, as it could be considered an exhaustible natural resource. Mexico also argued that the current decree did not affect US corn imports. The US provided a rebuttal to Mexico's response, stating that Mexico's actions were against USMCA rules and that the 2023 decree hurt US corn imports into Mexico that year. Canada joined as a third party to the dispute, noting its systemic interest in the correct interpretation of sanitary and phytosanitary obligations under the USMCA, which govern measures protecting human, animal or plant life or health. In December 2024, the panel provided its final report supporting the United States claims. This led the Mexican government to issue an administrative agreement in February 2025 to make the application of specific components of the 2023 decree ineffective, such as the immediate ban on GM corn in dough and tortillas, and the instruction to gradually eliminate the use of GM corn for other food uses and animal feed.

There was a change to the Mexican constitution in March 2025 via a decree that      is relevant to the USMCA current review in three main areas. First, the constitution modified the text that originally stated the right to a nutritious and quality diet by stating corn as a Mexican- origin agricultural good and as an element of national identity. Second, the constitution prohibits the planting of GM corn on its territory. Third, the use of GM corn will be evaluated to make sure it is not a threat to biosafety, health, and biocultural heritage. According to this decree, the Mexican Congress had 180-days to make any legal changes to endorse this legislation. According to USDA, no follow-on legislation has been enacted as of December 2025. It is important to note that the US never challenged the Mexican cultivation ban of GM corn. Thus, under these changes to the constitution, it seems feasible for the US-Mexico corn trade to continue as it is. 

In Rounds 2 and 3 of the USMCA review (June and July 2026), agriculture has been featured on the agenda. Still, there are no official public documents with information specific to corn trade between the US and Mexico. Currently, corn trade between Mexico and the US is regulated by USMCA Chapters 2, 3, and 9. 

The USMCA US-Mexico Round 4, scheduled for September 2026 in DC, is likely to include agricultural issues on the agenda. There is likely to be interest on both sides in maintaining the status quo, which allows the US to continue exporting yellow corn primarily for animal feed to Mexico, and Mexico to continue supporting white corn as a main source for human consumption. Given the integration of both countries in the production and consumption of corn, reaching an agreement on how to proceed under the USMCA is important.

The author thanks Isabella Elias, MPP candidate at Pepperdine School of Public Policy, for research assistance.

 

---

[1] Please note that we use the term “genetically modified” interchangeable for “genetically engineered” for its closeness with the term used by Mexican legislation (geneticamente modificado)