D.O.C. seeks comments on Mexican sugar deal

by Ron Sterk
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WASHINGTON – The U.S. Department of Justice on June 14 released draft sugar agreements initialed by the governments of the United States and Mexico and opened a one-week comment period. The D.O.C. plans to sign final agreements by June 30.

A June 6 agreement in principle made significant revisions to the Dec. 19, 2014, trade agreements between the two countries that suspended anti-dumping and countervailing duties totaling nearly 80% on U.S. imports of sugar from Mexico. Flaws in those agreements in part allowed more refined sugar into the United States than anticipated, and allowed sugar classified as unrefined to bypass U.S. refiners, leaving some without sufficient feedstock. The 2014 suspension agreements superseded unlimited, duty-free trade of sugar and high-fructose corn syrup between the two nations provided for under the North American Free Trade Agreement.

The June 14 draft agreements reflect the June 6 agreement in principle to amend the 2014 agreements while also making some further revisions.

“The draft amendments released today reflect this agreement in principle and address the injury found to have been caused to the U.S. sugar industry by sugar imported from Mexico,” the D.O.C. said.

 

Most of the major elements of the agreement in principle and the June 14 draft agreements, including the raw/refined split, purity/polarity, price and enforcement, appear to remain intact.

An initial comparison of the June 14 and June 6 documents indicates the D.O.C. maintained the raw/refined mix of sugar imports at 70% raw and 30% refined compared with 47% raw and 53% refined in the 2014 agreements. It also maintained the dividing line between raw and refined sugar at 99.2 polarity compared with 99.5 in the 2014 document, which ensures “estandar sugar would be considered refined sugar subject to the refined price and a limit of 30%,” the D.O.C. said. The June 14 and June 6 documents also maintain new minimum prices for import sugar at 28c a lb for refined and 23c a lb for raw, compared with 26c and 22.25c, respectively, in 2014.

One difference in the June 14 draft agreements appears to be a change to May 1 from April 1 in the June 6 agreement as the date additional sugar needs would revert back to 99.5 polarity and the 70% raw and 30% refined import ratio would not apply.

“Taken together, these amendments provide a significant improvement and are designed to address the concerns raised by the U.S. sugar industry with the operation of the suspension agreements,” the D.O.C. said.

A U.S. sugar industry group that opposed the June 6 agreement said it will support the new draft agreements.

The comment period on the draft agreements closes June 21 with rebuttal comments, limited to points raised in the initial comments, due by June 26. The D.O.C. said it was “currently scheduled” to sign final amendments to the agreements by June 30.
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