DOC extends investigation into Mexican sugar subsidies

Published online: Jun 04, 2014

WASHINGTON—The U.S. Department of Commerce (DOC) on Tuesday announced that it needs more time to examine the numerous and complex programs used by the Mexican government to subsidize its sugar industry.

The DOC is currently conducting antidumping and countervailing duty investigations of subsidized Mexican sugar. It was scheduled to issue a preliminary determination of subsidies in the countervailing duty investigation by June 24, but has extended that deadline to Aug. 25.

“This action was expected and very much in order considering Mexico’s complicated web of sugar subsidies and the fact that Mexico’s government owns a large chunk of the industry,” said Phillip Hayes, a spokesman for the American Sugar Alliance. “We want the Commence Department to take all the time necessary to ensure it reaches a fair and accurate conclusion.”

The U.S. International Trade Commission (ITC) recently made a preliminary determination by a 5 to 0 vote that imports of dumped and subsidized Mexican sugar are materially injuring U.S. sugar producers.

According to the antidumping and countervailing duty petitions filed by the U.S. sugar industry, Mexico has systematically dumped subsidized sugar onto the U.S. market, costing domestic producers an estimated $1 billion this year alone. In addition, the U.S. Department of Agriculture (USDA) has already spent $278 million to keep the market from collapsing under the surge of subsidized Mexican imports.

Despite the harm being inflicted by Mexico’s unfair trading practices, some special interest groups are still angling to weaken U.S. sugar policy and alter market conditions through legislative amendments, Hayes explained.

“The USDA is trying its best to deal with the flood of subsidized Mexican sugar and give U.S. farmers a chance to survive while the DOC and ITC conduct their impartial investigations,” he said. “This is no time to gut U.S. sugar policy.”

Last week, an amendment by Congressman Charlie Dent (R-PA) to prevent government loans to many sugar producers was defeated 18 to 32 by the House Appropriations Committee. When appropriations bills reach the House and Senate floors additional amendments may be forthcoming.

“If lawmakers are interested in protecting taxpayers and promoting a market where the most efficient producers thrive instead of the most subsidized, then they will reject attacks on sugar policy and let the government investigations into Mexico run their course,” Hayes concluded.