FARGO, N.D. - The American Sugar Alliance has praised the tentative agreement between the Mexican and U.S. governments to place limits on Mexican sugar shipments to the U.S. and to suspend the anti-dumping and countervailing duty investigations of sugar from Mexico.
However, the U.S. Sweetener Users Association said it was “deeply concerned” about the agreement
The deal would slow the flood of sugar that had plunged the region’s sugar beet cooperative profits for the 2013 and 2014 crops with the price declines threatening U.S. farmers and refiners.
The U.S. Department of Commerce announced Monday it had initialed draft agreements with Mexican government and sugar exporters that, if adopted, will suspend the investigations.
“We believe that U.S. sugar producers and consumers alike will benefit if an agreement is finalized. Like our counterparts in Mexico, we want NAFTA (the North American Free Trade Agreement) to operate as intended and to foster free and fair trade in sugar between the countries. The agreement does not reopen or undermine NAFTA, and it will not require any changes to U.S. sugar policy in the recently passed farm bill,” said Phillip Hayes, a spokesman for the alliance, which represents beet and cane growers.
The sweetener association, which represents candy companies and other industrial users of sugar, said it was “deeply concerned about the implications of the proposed suspension agreements for the U.S. sugar market, American consumers and manufacturers.”
“The uncertainty surrounding the anti-dumping and countervailing duty petitions filed by U.S. sugar producers has already driven up U.S. sugar prices - costing consumers an additional
$837 million since April and jeopardizing thousands of American manufacturing jobs in the process,” the group said in a statement.
“If the draft agreements between the United States and Mexico are adopted, we can expect the same market uncertainty that is causing unduly high U.S. sugar prices now. That uncertainty will mean American consumers and U.S. sweetener users, including food and beverage manufacturers, will be forced to spend more for sugar,” the group said.
“In recent years, the United States has imported 2 to 2.1 million tons of sugar from Mexico, and as part of both governments’ commitments under NAFTA there has been free trade in sugar since early 2008. Entering into a managed trade agreement would not only set a bad precedent for our bilateral trade relationship, it would move America’s already protectionist sugar policy in the wrong direction, farther away from a free market approach,” the sweetener users said.
Investigations were started in April 2014 after the U.S. sugar industry filed petitions alleging the industry lost $1 billion because of unfair pricing and subsidies on Mexican sugar. The DOC preliminarily determined that sugar from Mexico had been sold in the U.S. at dumping margins ranging from 39.5 percent to 47.2 percent.
The Reuters news service said this new deal defuses a dispute in which Mexico threatened to take U.S. support for its sugar industry to the World Trade Organization and could have led to retaliatory duties on U.S. corn fructose exports to Mexico. The news organization quoted an unnamed trade lawyer as saying Mexico had demanded 1 million tons of sugar exports as part of a deal, but details couldn’t immediately be confirmed.
The extra sugar in the U.S. triggered forfeitures of sugar under loan to the U.S. Department of Agriculture and figured heavily into steep declines in sugar beet payments to farmers in the Red River Valley and around the country.
The agreement will allow Mexican sugar to continue to enter the U.S. without penalty duties and creates “mechanisms,” or formulas to ensure that “unfairly traded imports of Mexican sugar do not cause injury to U.S. sugar producers.”
Draft texts of the agreements will be available for a comment period through Nov. 10 and the agreement could become final on Nov. 26, according to sources.