WASHINGTON—America’s sugar producers asked the United States government on March 28 to take corrective action against Mexico’s sugar industry for dumping subsidized sugar onto the U.S. market and inflicting harm on U.S. growers and taxpayers.
The antidumping and countervailing duty petitions filed with the U.S. International Trade Commission and U.S. Department of Commerce allege that the Mexican industry has shipped sugar to the United States at dumping margins of 40 percent or more and has received substantial subsidies from Mexican federal and state governments.
All told, these actions cost U.S. sugar producers nearly $1 billion in net income for the 2012/2013 crop year, according to the filings.
The North American Free Trade Agreement (NAFTA) “gives Mexico the right to export sugar to the United States on a tariff-free and quota-free basis—but that does not give the Mexican industry the right to export to the U.S. market at dumped prices, nor does it permit the Mexican government to subsidize its sugar industry without regard to the impact of those subsidies on U.S. producers,” the petitions read.
The Mexican sugar industry—20 percent of which is owned and operated by the Mexican government—has rapidly increased exports to the United States in recent years, rising from 9 percent of the U.S. market in 2011/2012 to nearly18 percent in 2012/2013. Over that same period, historic surpluses have sent U.S. sugar prices to unsustainable levels.
U.S. prices have been cut in half since late 2011 and are now trading at the same lows of the 1980s. U.S. sugar policy also incurred a taxpayer cost in 2013, after running at no cost for the past 10 years, as the U.S. Department of Agriculture (USDA) sought to steady a market awash in subsidized and dumped Mexican imports.
“Secretary Vilsack and his team at the USDA should be commended for their extraordinary actions on behalf of America’s sugar farmers,” said Phillip Hayes, a spokesperson for the American Sugar Alliance. “Unfortunately, the unrelenting flood of dumped and subsidized sugar from Mexico has overwhelmed the U.S. market and USDA’s efforts, and we’ve been left with no alternative but to file these cases.”
Hayes noted that this is now a legal dispute and that the facts are straightforward.