MEXICO CITY (Reuters) - Mexican President Claudia Sheinbaum expects Congress to approve a ban early next year on planting genetically modified corn in the country, she said on Saturday.

Sheinbaum's announcement comes a day after a trade-dispute panel ruled Mexico's restrictions on U.S. exports of GM corn violate the USMCA trade agreement.

"With the help of Mexico's Congress, we are going to reverse this resolution because very soon, in February, they are going to legislate, I am sure, that you can't plant genetically modified corn,"  Sheinbaum said at a public event. Mexico's Congress is dominated by the ruling party.

"We must protect Mexico's biodiversity in our country ... without corn there is no country."

Such a ban may increase Mexican supplies of non-GM corn but not prevent imports of GM varieties, however.

A GM crop contains genetic material that is not naturally found in the plant, for example to better protect against disease. Farmers have widely adopted such crops in some countries such as the United States, but critics say their safety for human health and the environment is unproven.

The impasse escalated when the U.S. government called on a dispute resolution panel to overturn Mexico's February 2023 presidential decree that banned the use of GM corn to make tortillas and dough.

The decree also advocated for replacements in industrial production for human consumption and animal feed.

Mexico's economy and agriculture ministries said in a joint statement that they disagreed with the ruling, but would respect the decision. The agencies later said the panel's report referred exclusively to trade between Mexico and the United States.

Mexico, the birthplace of modern corn, bans GM corn for fear it could contaminate native varieties of the grain. Yet the country is the largest foreign buyer of U.S.-grown yellow corn, almost all of which is genetically modified.

The Mexican government expects local buyers to import a record 22.3 million metric tons during the 2023/24 crop season.

(Report by Diego Oré; Writing by Alexander Villegas; Editing by Rod Nickel)