There were hints last week at the International Sweetener Symposium in Stowe, Vt., that the key players in the dispute between Mexican and U.S. sugar producers may be moving toward an agreement.
U.S. companies filed an anti-dumping case against Mexican producers on March 28. The U.S. International Trade Commission issued a preliminary determination on May 12, but final orders of duties - if any - aren't due until next year. The consensus in Stowe was that the U.S. government wants a negotiated agreement that would set a level of exports that is acceptable to both sides.
The real question is when that agreement will happen.
The case "will likely run its full course" before such an agreement is reached, said Frank Jenkins, president of JSG Commodities in a presentatiion Aug. 4 in Stowe.
That would be a shame - and utterly unnecessary. The sugar case (plus a similar anti-dumping against Mexican rebar steel) is harming relations between the two countries at a critical time, right on the brink of negotiations over the Trans-Pacific Partnership trade agreement.
Tom Vilsack, U.S. Secretary of Agriculture, has clearly signaled that he thinks the sugar anti-dumping action is damaging. (He may also be worried about the effect on corn farmers in his own state of Iowa if Mexico retaliates against abundant high-fructose corn syrup exports from the U.S.)
But Jenkins could well be wrong in his prediction that a settlement won't be reached until after January. Our own sources, both in Stowe and Washington, say that both U.S. and Mexican producers want an agreement - and so does the U.S. government.
Michael Scuse, USDA Under Secretary for Farm and Foreign Agricultural Services, in a speech also Aug. 4 at Stowe, made it "abundantly clear that his agency is hoping that a settlement can be reached to end the ongoing trade remedy probe into Mexican sugar imports and avoid the imposition of antidumping and countervailing duties," according to Inside US Trade.
"We hope," Scuse said, "that the two sides can reach a mutually beneficial agreement that protects our domestic sugar producers and provides consumers with an abundant supply." In his remarks, Scuse indicated that, without some sort of agreement, the USDA will have an extremely difficult time managing the sugar supply.
Jenkins made the same point. He titled his talk, "U.S. and Mexican Sugar Complex: A Return to Managed (and Manageable) Trade?" Right now, Jenkins contends, the sugar trade is unmanageable.
The U.S. government needs a resolution in order to do its work. The users of sugar, such as candy makers and food processors, need a resolution to do theirs. Producers and refiners of sugar need a resolution as well. And the sooner the better.
The truth is that an agreement between the U.S. and Mexico would be a far better outcome than a long-running, contentious dispute with the potential to become a full-fledged trade war involving other commodities and sectors.
The Agriculture Department is right. We need an agreement. Now.
Source: www.sugartradefairness.com