Monday, 21 August, 2017

Mexico sugar lobby says still wants dumping probe of US fructose

US, Mexico Reach Sugar Pact Without Backing from US Producers US and Mexico reach agreement in sugar dispute
Marta Holmes | 08 June, 2017, 00:41

"We have gotten the Mexican side to agree to almost every request made by the USA sugar industry to address flaws in the current system and ensure fair treatment of American sugar growers and refiners", Dept. of Commerce Secretary Wilbur L. Ross said yesterday at a joint press conference at the Chamber of Commerce in Washington, D.C., with Mexico's economy minister, Ildefonso Guajardo, Vicki Needham reports for The Hill.

Since the new deal is an agreement in principle, there remains the possibility that it may not stand since us sugar producers, who filed the original dumping charges against Mexico, oppose it due to the aforementioned "loophole".

While this agreement is not yet being supported by the USA sugar industry, the government was positive that the Mexican side had agreed to every request made by the US industry to address the issues in the current system.

The dispute comes as the two neighbors, along with Canada, are set to renegotiate the North American Free Trade Agreement (NAFTA).

"The agreement would allow Mexico to maintain its position as the main supplier of sugar to the United States market without paying compensatory tariffs imposed by unfair investigations", Guajardo said during an interview with Televisa network on Tuesday.

But the pact is expected to increase costs for sugar users in the United States.

USA refiners have complained that high-quality Mexican raw sugar was going straight to sugar consumers, rather than passing through US refineries. This results in a significant increase in the amount of raw sugar available to USA sugar refiners while ensuring that subsidized refined Mexican sugar imports do not injure US refiners. It was unclear if Ross would impose the settlement if USA producers did not sign onto it.

Sources on both sides of the border said on Monday that the USA sugar industry had added new demands outside of the terms agreed on earlier in the day by the two governments.

In return, Mexico has agreed to reduce the amount of refined sugar it sends to the United States, he said.

The pact reached between the two countries would require Mexico to reduce the share of refined sugar it exports to the US and increase raw sugar exports.

The U.S. and Mexico have been sparring for years over sugar.

"This is a great day for American jobs", said John Bode, president and CEO of the CRA. With both sides demanding more, he coolly pursued the broader public interest.

Enforcement - Mexico agreed to increased enforcement measures and to accept significant penalties for violations, including a reduction in the amount of sugar allowed to be imported equal to twice the amount of any sugar found to be in violation of the modified agreements. "Thanks to his leadership, USA sugar interests have much stronger protections than the previous suspension agreements without threatening the $500 million in US corn sweetener exports to Mexico that support 4,000 U.S.jobs". USDA will specify whether the additional-need sugar is raw or refined without regard to the 70/30 split. Consumers will then pay higher prices.

ASR and fellow cane refiner Imperial Sugar, owned by commodities firm Louis Dreyfus Company BV, have said they are being starved of raw supplies under the current deal. "The agreement in principle does not address the fact that the price of sugar in this country is already 80% higher than the world price".

"Avoiding a trade war will benefit everyone, and I'm glad that this years-long trade dispute is finally reaching its end", said Republican Senator Chuck Grassley of Iowa, adding that Ross balanced all interests in the negotiations. Further, USDA retains the flexibility to specify the polarity of post-April 1 additional needs sugar specifically needed to rectify certain extraordinary and unforeseen circumstances that seriously threaten the economic viability of the US sugar refining industry.

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