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U.S. demands formal talks with Mexico over GMO corn dispute



U.S. demands formal talks with Mexico over GMO corn dispute
© Reuters. FILE PHOTO: A small grain farmer cleans corn plants on her farm at La Constitucion Totoltepec neighbourhood, in Toluca, Mexico, August 3, 2022. REUTERS/Edgard Garrido/File Photo

By Cassandra Garrison and David Lawder

CHICAGO/WASHINGTON (Reuters) -The United States requested formal trade consultations with Mexico on Monday over U.S. objections to its southern neighbor’s plans to limit imports of genetically modified corn and other agricultural biotechnology products.

The U.S. Trade Representative’s office announced the request for technical talks after months of informal discussions with Mexican officials over their plans to ban GMO corn for human consumption failed to satisfy U.S. trade officials.

The consultations are the first formal step toward a U.S. request for a dispute settlement panel under the U.S.-Mexico-Canada Agreement on trade (USMCA) that could ultimately lead to retaliatory U.S. tariffs if no resolution is reached.

The dispute could further strain U.S.-Mexico relations. U.S. officials say it puts some $5 billion of U.S. corn exports to Mexico at risk and could stifle biotechnology innovation at a time of high food inflation as increasingly severe weather threatens crop production.

“Mexico’s policies threaten to disrupt billions of dollars in agricultural trade and they will stifle the innovation that is necessary to tackle the climate crisis and food security challenges if left unaddressed,” U.S. Trade Representative Katherine Tai said in a statement.

“We hope these consultations will be productive as we continue to work with Mexico to address these issues.”

Mexico’s Economy Ministry said in a statement that it viewed the U.S. request as seeking a solution in a “cooperative way,” and would use the consultations to show that its policies have caused no trade harm.

The Mexican government has previously described Washington’s disagreement with its policies as politically motivated.

The United States has previously threatened to take the issue to a trade dispute panel under the trilateral agreement with Mexico and Canada over the plan, which would ban genetically modified corn for human consumption.

The United States and Mexico have also been in talks since July to resolve a separate dispute over Mexico’s state-driven energy policies, which USTR says discriminate against U.S. companies.


Washington will do whatever is necessary to ensure U.S. farmers and exporters have “full and fair access” to the Mexican market, U.S. Agriculture Secretary Tom Vilsack said in a statement.

    “We remain firm in our view that Mexico’s current biotechnology trajectory is not grounded in science, which is the foundation of USMCA.”

The consultations are requested under USMCA’s chapter on food safety, which requires a science-based approach to national regulations.

USTR officials declined to speculate on potential retaliatory measures that could be taken under USMCA enforcement rules if the dispute remains unresolved, saying they were focused on the consultations leading to a satisfactory outcome for both countries.

“The core resolution that we’re seeking really is transparent and predictable access to the Mexican market – to be able to continue to export the types of products that we have exported for decades, and that Mexico recognizes the safety of these product,” one of the USTR officials told reporters.

Mexico’s limits on genetically modified corn threatens “serious harm to U.S. farmers and Mexican livestock producers,” the official added.

USTR said the United States exported $28 billion in agricultural goods to Mexico in 2022, with about $43 billion in ag imports from Mexico.

Corn for food use comprises about 21% of Mexican corn imports from the United States including both white and yellow corn, a representative from the National Corn Growers Association said, citing U.S. Grains Council data.

The corn growers’ lobby group called on the USTR to expedite the process under the USMCA.

    “Mexico’s position on biotech corn is already creating uncertainty, so we need U.S officials to move swiftly and do everything it takes to eliminate this trade barrier in the very near future,” said NCGA President Tom Haag.

USTR’s move won praise from a number of U.S. lawmakers who have been clamoring for the Biden administration to take a harder stand on the issue.

“I’m grateful USTR has chosen to take a stand for American trade and begin the dispute process with Mexico over its ridiculous GMO corn ban,” Republican Senator Chuck Grassley, himself an Iowa farmer, said in a statement.

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French climate investments to drive up national debt burden – think-tank




French climate investments to drive up national debt burden - think-tank
© Reuters. FILE PHOTO: French President Emmanuel Macron visits Institut Curie laboratory ahead of announcements on biomedical research in Saint-Cloud, France, May 16, 2023. REUTERS/Benoit Tessier/Pool

PARIS (Reuters) – Investments that France needs to finance its transition to a low-carbon economy are set to add 25 percentage points to its debt burden by 2040, a report from the government-funded France Strategie think-tank said on Monday.

France will need to make additional annual investments of about 67 billion euros ($74 billion) – more than 2% of economic output – by 2030 to meet its objectives for reducing its dependence on fossil fuels, France Strategie calculated.

The think-tank, which is part of the prime minister’s office, said the financial effort would weigh heavily on public finances partly because the investments imply lower potential growth, which would cut tax revenues.

As a result, the debt burden would rise by 10 percentage points by 2030 and 25 percentage points by 2040, which France Strategie suggested might need to be financed in part by a temporary tax on wealthy households.

President Emmanuel Macron’s government has hoped to chip away in the coming years at France’s national debt, which currently stands at slightly more that 111% of gross domestic product after surging during the COVID crisis.

The report said the financial burden of investing in Europe’s energy transition also posed a risk in terms of international economic competition, as other major economies such as the United States and China were less concerned about budgetary constraints.

About 100 experts in French and European research groups as well as public French institutions participated in the report, which was led by economist Jean Pisani-Ferry, who previously helped Macron draft his economic programme.

($1 = 0.9084 euros)

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Crude oil largely flat; Caution ahead of debt ceiling meeting




Crude oil largely flat; Caution ahead of debt ceiling meeting
© Reuters — Oil prices traded largely unchanged Monday, with traders cautious ahead of the resumption of U.S. debt ceiling negotiations while supply concerns add support. 

By 09:30 ET (13:30 GMT), futures traded 0.1% lower at $71.59 a barrel, while the contract fell 0.1% to $75.52 a barrel.

U.S. President Joe Biden and Republican House Speaker Kevin McCarthy are set to meet later this session to try and agree on a deal to raise the more than $31 trillion debt ceiling.

Concerns that a failure to come up with an acceptable compromise have weighed heavily on the market over the recent weeks, as this would result in the U.S. defaulting on its debt obligations, likely plunging the global economy into recession.

The U.S. Treasury has warned that the government could run out of money to pay its bills as soon as June 1.

That said, both crude benchmarks managed to post gains last week, ending four straight weeks of heavy declines, helped by the U.S. starting to refill its Strategic Petroleum Reserve as well as the supply disruptions in Canada, due to early wildfires in the crude-rich Alberta province. 

Additionally, the latest data from showed the U.S. oil rig count fell by 11 over the last week, to its lowest count since June 2022.

“A slowdown in U.S. drilling activity is a concern for the oil market, which is expected to see a sizable deficit over the second half of the year,” said analysts at ING, in a note. 

“Producers appear to be responding to the weaker price environment, rather than expectations for a tighter market later in the year.”

This brings the Organization of Petroleum Exporting Countries and allies, known as OPEC+, firmly into focus, with its next meeting in early July. 

The cartel surprised the market with an output cut at the last meeting, which came into effect at the start of this month. However, this has done little to support crude prices, implying the members may be looking at a further reduction in production.

The fact U.S. producers are not increasing in number will be good news for OPEC+, ING added, “as it suggests that they will be able to continue supporting prices without the risk of losing market share to U.S. producers.”

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California grid operator signs off on $7.3 billion of power lines




California grid operator signs off on $7.3 billion of power lines
© Reuters. FILE PHOTO: A woman jogs by power lines, as California’s grid operator urged the state’s 40 million people to ratchet down the use of electricity in homes and businesses as a wave of extreme heat settled over much of the state, in Mountain View, Californi

(Reuters) – California’s electric grid operator has approved a plan expected to cost $7.3 billion for 45 new power transmission projects over the next decade and made it easier for new power plants in high-priority areas to connect to the grid.

The projects will support the development of more than 40 gigawatts (GW) of new generation resources, the California Independent System Operator (CAISO) said on Thursday.

“With electrification increasing in other sectors of the economy, most notably transportation and the building industry, even more new power will be required in the years ahead,” the CAISO said.

The vast majority of the transmission projects will be built in California, with some in neighboring Arizona, it said.

The power lines recommended by CAISO’s 2022-2023 Transmission Plan will allow the state’s grid to add more than 17 GW of solar resources, 8 GW of wind generation, 1 GW of geothermal development, and battery storage projects.

CAISO will prioritize connecting power plants to the grid in specific geographical zones identified by its plan where developing new power lines and plants “make the most economic and operational sense.”

The grid operator also approved proposed reforms to account for “increasing levels of net load forecast uncertainty between day-ahead and real-time markets … as the generation fleet evolves towards a cleaner, but more variable, resource mix.”

It projected that its transmission plan next year could include the need to add 70 GW of new power to the grid by 2033, rising to 120 GW as the state seeks to meet its goal of a carbon-free power system by 2045.

Power supply in the U.S. West is vulnerable to extreme heat as it relies on regional energy transfers to meet demand at peak or when solar output is diminished, the North American Electric Reliability Corp (NERC) said in its summer outlook on Wednesday.

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