Mexican Deal On Sugar With U.S. Is Complete, Details Later From DOC

 

Red River Valley sugar beet growers appear to have gotten what they are looking for in a deal over Mexican sugar imports. Here is today’s press release from the American Sugar Alliance:

WASHINGTON—The U.S. Department of Commerce (DOC) today announced that the U.S. and Mexican governments have reached an agreement to suspend the ongoing antidumping and countervailing duty investigations of sugar from Mexico. Phillip Hayes, a spokesman for the American Sugar Alliance, released the following statement about the settlement.

 

“The final suspension agreements should achieve U.S. sugar producers’ main goal by stopping Mexico from dumping subsidized sugar onto the U.S. market and violating U.S. trade law. It is a good deal for U.S. producers, U.S. taxpayers, and U.S. consumers, and we would like to thank officials at the DOC and USDA for their hard work in negotiating the agreements.

 

“Like our counterparts in Mexico, we want NAFTA to operate as intended and to foster free and fair trade in sugar between the countries. This settlement helps achieve that objective.”

 

The DOC will provide details of the agreements, which do not reopen or undermine NAFTA and will not require any changes to U.S. sugar policy in the recently passed Farm Bill, Hayes says.

Here are the key terms of the agreements, according to the Department of Commerce:

• The CVD agreement contains provisions to prevent an oversupply of sugar in the U.S. market.

Specifically, Commerce will calculate an export limit for Mexico based on information it obtains from

the U.S. Department of Agriculture (USDA) about the U.S. needs for sugar in a given year. The CVD

agreement will also prevent imports from being concentrated during certain times of the year, and will

limit the amount of refined sugar that may enter the U.S. market from Mexico.

• Mexico’s export limit is set at 100 percent of U.S. needs after accounting for U.S. production and

imports from tariff rate quota countries. (U.S. needs are calculated based on USDA data.)

• For purposes of the agreement, “refined sugar” is defined as sugar with a polarity of 99.5 percent or

greater. “Other sugar” is sugar that does not meet the definition of refined sugar. The agreement caps

exports of refined sugar at 53 percent of total exports from Mexico.

• The Government of Mexico will allocate the amount of sugar that each Mexican sugar

producer/exporter can export to the United States. As part of this process, the Government of Mexico

has agreed to establish an export licensing mechanism. Sugar from Mexico will not be able to enter

the United States if it is not accompanied by an export license.

• The signatories of the CVD agreement are Commerce and the Government of Mexico.

AD Agreement

• The AD agreement establishes reference prices, or minimum prices, to guard against undercutting or

suppression of U.S. prices. These minimum prices are $0.26/pound by dry weight commercial value

for refined sugar and $0.2225/pound by dry weight commercial value for all other sugar. “Refined

sugar” is defined as sugar with at least 99.5 percent polarity or above. “Other sugar” is sugar that

does not meet the definition of refined sugar.

U.S. Department of Commerce | International Trade Administration

• The signatories of the AD agreement are Commerce and the Mexican sugar producers and exporters

which account for substantially all of the subject merchandise imported into the United States.

Monitoring and Enforcement

• Commerce and the relevant Mexican government agencies have agreed to establish information

exchanges and consultative processes in relation to the operation and enforcement of the agreements.

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• Commerce will instruct U.S. Customs and Border Proctection to terminate the suspension of

liquidation and refund any cash deposits collected as a result of the preliminary AD and CVD

investigation determinations consistent with the relevant provisions of U.S. antidumping and

countervailing duty law.

The Mexican sugar imports in the past few years have led to Mexican imports that depressed the price of U.S. sugar and led to a trade case by the U.S. producers against the Mexicans. The sugar price cuts have cost the region’s growers — who also own the factories as cooperatives — hundreds of millions of dollars.