Sugar users urge no restrictions on Mexico trade

by Ron Sterk
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WASHINGTON — The Coalition for Sugar Reform and 17 other industry and consumer groups in a July 15 letter urged the U.S. government not to enter negotiations with Mexico on a managed trade agreement in response to the trade dispute between U.S. sugar producers and the Mexican sugar industry.

“We have heard troubling rumors about pressure being applied on the administration to consider the negotiation of a managed trade agreement between the governments of Mexico and the United States to resolve the antidumping and countervailing duty petitions filed against U.S. imports of sugar from Mexico,” the Coalition said in its letter to U.S. secretary of agriculture Tom Vilsack, U.S. secretary of commerce Penny Pritzker and U.S. Trade Representative Michael Froman.

“The U.S. sugar industry is already highly protected from import competition and other market forces, and we are well aware of the potential for retaliation against U.S. exports to Mexico whenever the United States imposes new barriers to imports from Mexico,” the letter said.

“A managed trade agreement — restricting imports of sugar from Mexico — would run counter to obligations the United States has under taken in NAFTA to open its market to sugar imports from Mexico,” the letter said. “We urge the administration not to enter into negotiations with Mexico toward reaching a managed trade agreement on sugar, which would undermine the overall U.S. trade agenda.”

The American Sugar Coalition, a group of eight U.S. beet and cane growers and refiners groups, filed antidumping and countervailing duty petitions with the U.S. International Trade Commission and the U.S. Department of Commerce on March 28 alleging the Mexican sugar industry shipped sugar to the United States at dumping margins of 45% or more and has received substantial subsidies from the Mexican government. The petitions claim Mexico’s actions cost U.S. sugar producers more than $1 billion in the current 2013-14 crop year.

The D.O.C. on April 18 said it was initiating an antidumping and countervailing duty investigation into U.S. imports of sugar from Mexico. The I.T.C. on May 9 made a preliminary determination of injury and said it would proceed with an investigation as well. On May 29 the D.O.C. said it would delay from June 23 to Aug. 25 a preliminary determination in its investigation. There has been talk in the trade that a negotiated agreement between the two countries may be worked out prior to the Aug. 25 D.O.C. deadline, to which the July 15 letter from the Coalition for Sugar Reform referred.

In addition to the Coalition for Sugar Reform, the letter was signed by the American Bakers Association, the American Beverage Association, the American Frozen Foods Institute, the Chicago Area Retail Bakers Association, the Competitive Enterprise Institute, the Council for Citizens Against Government Waste, the Food Marketing Institute, the Grocery Manufacturers Association, the Independent Bakers Association, the International Dairy Foods Association, the National Confectioners Association, the National Foreign Trade Council, the National Consumers League, the Retail Bakers of America, the Snack Food Association, the Sweetener Users Association and the U.S. Chamber of Commerce.

The North American Free Trade Agreement provides for tariff-free and quota-free trade of sugar and corn sweeteners between the United States and Mexico. NAFTA also permits the filing of antidumping and countervailing duty cases, with about 60 cases having been filed between the two countries since the agreement went into effect.
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