A trade group for U.S. sugar growers and processors, after objecting a week ago to a tentative U.S.–Mexico agreement on sweetener trade, said the pact was strengthened in follow-up negotiations and that it now supports the deal. The American Sugar Alliance (ASA) said it expects strong enforcement of the agreement, under which Mexico will limit its sugar shipments and the United States will suspend antidumping and countervailing duties on the sugar.
The sugar industry announced its support one day after the Commerce Department invited public comment on drafts initialed by both governments. Comments will be accepted until June 21; the department will then consider them and decide on any changes. It plans to sign the final amendments to the agreement by June 30.
In exchange for limiting its shipments, Mexico will be first in line to supply U.S. needs for additional sugar; the USDA begins calculations each April 1 on whether the sugar supply, split between imports and domestic production, will be sufficient for the fiscal year that ends on Sept. 30. The United States assigns quotas by country at the start of each fiscal year. However, NAFTA guaranteed free trade in sweeteners for Mexico. U.S. growers and processors accused Mexico of dumping, which, since 2014, has led to bi-national agreements that control the flow of sugar.
In a statement, the ASA said its conversations with Commerce Secretary Wilbur Ross and Agriculture Secretary Sonny Perdue over the past week assured the group that there would be eagle-eyed enforcement of the agreement. Last week, the ASA said the provision on “additional sugar” might be exploited by Mexico to send a torrent to sugar northward. “Thanks to the efforts of leaders like Secretaries Ross and Perdue, our trade laws will be enforced, the U.S. market should return to a level playing field, and U.S. farm and producer jobs will be saved from unfair Mexican trade,” said an ASA spokesman.
Food and beverage companies said the new agreement will increase sugar prices in the United States, to their detriment and that of consumers. U.S. makers of corn syrup, used in Mexico, said the agreement will avert any retaliation on their products.
Under the agreement, there will a higher price for sugar at Mexico’s mills; a larger portion of Mexico’s shipments will be raw sugar, which will need processing in the United States; and purity standards for Mexican sugar will be revised to assure that more unrefined sugar is shipped.
The draft agreement on antidumping duties is available here.
The draft agreement on countervailing duties is available here.