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US Sugar Co. Wants Mexico Trade Deal Scrapped

One of the nation’s leading sugar companies on Monday asked the U.S. Department of Commerce to rip up agreements managing its trade with Mexico, saying that the deal has led to an increase in Mexican shipments to end users while cutting down on the raw sugar sold to U.S. refiners.
The demand from Imperial Sugar Co. comes in the wake of preliminary reports from Commerce indicating that the 2014 deal that halted U.S. trade cases against Mexican sugar imports is not working as it was intended.

“If these agreements are left in place, they will continue to endanger thousands of cane sugar refining jobs in cities that need these jobs the most … while depressing sugar cane and beet farmer incomes across the United States for yet another year if not longer,” Imperial President and CEO Michael A. Gorrell wrote to Obama administration trade officials.

Under the terms of the agreement, the U.S. sugar industry agreed to stop pursuing duties on their Mexican competitors. In exchange, the agreement imposed quotas and price floors for Mexico’s producers.

Commerce has begun its review of the agreement and has raised doubts about its functionality. The analysis is not yet complete, but Gorrell made clear that the U.S. industry should not have to wait around for the agency to complete its work and instead called for the agreements to be removed entirely.

According to Imperial, the last two years that the agreements have been in place have seen a dramatic drop in the shipments of raw Mexican sugar to U.S. refining companies as shipments of refined sugar to users such as candy companies have steadily ticked up.

“The basic principle of whether Mexico ships raw sugar to cane sugar refiners or finished product to our customers is critical to the success of any agreement that the U.S. government negotiates to suspend duties under this investigation,” Gorrell said. “Without this raw sugar supply, U.S. cane sugar refineries may be forced to close down.”

Making matters worse, according to Imperial, is the fact that the Mexican government and its industries have been mostly unwilling to budge in any attempt to tweak or modify the agreements. Specifically, Gorrell said that each time a new U.S. industry offer has been tabled, it has been met mostly with intransigence or deflection from the Mexican side.

The investigations are Suspension Agreement on Sugar from Mexico; Administrative Review of the Agreement Suspending the Countervailing Duty Investigation on Sugar from Mexico, case number case number C-201-846; and Antidumping Duty Suspension Agreement on Sugar from Mexico; Administrative Review, case number A-201-845 at the U.S. Department of Commerce’s International Trade Administration.

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