There are still details to work out but the commerce ministers of Mexico and the United States announced an agreement in principal on sweetener trade after negotiations stretched a day past the U.S. deadline for a deal. The tentative agreement takes off the table a long-running dispute as the Trump administration prepares its proposals for revising the North American Free Trade Agreement.
Commerce Secretary Wilbur Ross said Mexico agreed “to nearly every request made by U.S. industry to address flaws in the current system.” In exchange, Mexico will be first in line to supply U.S. needs for additional sugar; the USDA begins calculations each April 1 whether the sugar supply, split between domestic and foreign growers, will be sufficient to meet demand. The United States assigns import quotas by country at the start of each fiscal year.
“Unfortunately, despite all of these gains, the U.S. sugar industry has said it is unable to support the new agreement, but we remain hopeful that further progress can be made during the drafting process,” said Ross. The trade group American Sugar Alliance, which includes growers and processors, said language on additional sugar was “a major loophole” that would allow dumping of sugar by Mexico. “We will work with Secretary Ross in the coming days to see if that loophole can be effectively closed,” the alliance said.
The Corn Refiners Association said the U.S.-Mexico package will protect the sugar industry “without threatening the $500 million in U.S. corn sweetener exports to Mexico that support 4,000 U.S. jobs.” Mexico could have retaliated against U.S. corn syrup if the United States reimposed antidumping and countervailing duties on Mexican sugar.
Under NAFTA, Mexico was given duty-free access to the U.S. sugar market. The nations agreed to regulate cross-border trade because of complaints that Mexican sugar was being sold at unfairly low prices.
The agreement in principal sets a higher price for sugar at Mexico’s mills, reduces the portion of imports that can be refined sugar, and changes the purity standard for imports to assure that more unrefined sugar is shipped.
For a Commerce Department fact sheet on the sugar agreement, click here.