US, Mexico reach sugar pact despite US producer resistance
US, Mexico reach sugar pact despite US producer resistance
The governments of the United States and Mexico on June 6 announced an agreement in principle on sugar trade
08 June, 2017, 02:03
The United States will continue allowing Mexico to sell it sugar duty-free, the Mexican economy minister said Tuesday as the countries prepared to announce a deal on a long-running trade dispute.
He added that the agreement would go through a final drafting stage in which he hoped that the USA producers could come on board with it.
Mexico on Tuesday conceded to USA demands for changes in the terms of Mexican access to the lucrative US sugar market, striking a deal with Washington that will likely lift prices of the sweetener to US food processors and consumers. "I am glad to say that Minister Guajardo (Mexican Economy Minister Ildefonso Guajardo) and his colleagues have been honest and collaborative partners in seeking a fair and sustainable solution - this bodes well for our long-term relationship".
The American Sugar Alliance, which represents USA sugar producers, commended Mr. Ross for progress in the negotiations, but also expressed concerns.
"This loophole takes away the existing power of the USA government to determine the type and polarity of any additional sugar that needs to be imported and cedes that power to the Mexican government", charges Philip Hayes, a spokesman for the Arlington, Va. -based American Sugar Alliance, in a statement that opens by praising Ross for making "progress" in negotiations with Mexico.
Ross said the agreement have not been accepted by the USA sugar industry but that it will be discussed in the coming days. With Tuesday's accord, the maximum purity for raw-sugar imports will now be 99.2 percent, ensuring that the product will head to US refineries for further processing.
The agreement announced Tuesday would lower the allowed polarity, a measure of quality, for Mexican sugar exports.
"We will work with Secretary Ross in the coming days to see if that loophole can be effectively closed so that the basic provisions of the agreement are not undermined and U.S.D.A. can effectively manage the sugar program".
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In return, Mexico has agreed to reduce the amount of refined sugar it sends to the United States, he said.
The U.S. levied duties on Mexican sugar three years ago, but later struck a deal with its trading partner that ended those penalties. Additional need is defined as demand for sugar in excess of the demand USDA had predicted for that crop year.
An agreement was expected to help avoid potential retaliation from Mexico on imports of U.S. high-fructose corn syrup, a trade battle that would heighten U.S. -Mexico tensions as both countries along with Canada prepare to begin renegotiating the 23-year-old North American Free Trade Agreement in August.
The American Sugar Alliance said it objected to the new deal because Mexico would still be able to ship in refined sugar to meet additional USA demand above quota.
The agreement, if finalized, was expected to avert potential retaliation from Mexico on imports of USA high-fructose corn syrup which had anxious corn growers and refiners. Finally, it is of great importance that USDA will have the flexibility to protect the USA sugar industry by making polarity adjustments in the event of extraordinary or unforeseen circumstances.
"This agreement protects American workers and consumers and marks a dramatic improvement for the USA sugar industry", said U.S.D.A. secretary George (Sonny) Perdue.
Ross listed several of the factors that trade agreement either didn't address or didn't go far enough in dealing with.
US Secretary of Agriculture Sonny Perdue has issued a statement regarding a new agreement between the United States and Mexico regarding the importation of Mexican sugar. Consumers will then pay higher prices. Factions of the USA industry have said that the deal failed to eliminate harm to US producers from Mexican imports.
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