WASHINGTON, D.C.—The U.S. Department of Commerce has finalized an agreement with Mexico and suspended an investigation into the alleged illegal dumping of subsidized Mexican sugar onto the U.S. market.
The Commerce Department has instructed U.S. Customs and Border Protection to refund cash deposits paid as temporary tariffs on Mexican sugar—ranging from 2.99 percent to 17.01 percent. Commerce imposed the duties on Sept. 2, following its preliminary ruling that subsidies have given Mexican sugar an unfair advantage.
Additional duties ranging from 39.54 to 47.26 percent, in response to sugar dumping allegations, would have been implemented had the sides failed to finalize the tentative agreement they reached on Oct. 27.
Under the terms of the agreement pertaining to unfair subsidization, the department will calculate an export limit for Mexico based on USDA demand data, according to a Commerce Department fact sheet. The agreement also contains provisions to prevent imports from Mexico from being concentrated during certain times of the year.
Furthermore, the agreement caps exports of refined sugar into the U.S. at 53 percent of total Mexican sugar exports, compared with 60 percent in the draft version of the agreement. The Mexican government will designate sugar quantities allowed for each of its producers and will implement an export license that will be required of all shipments entering the U.S.
Mexican sugar producers and exporters, along with the Commerce Department, were signatories of the anti-dumping component of the agreement. Compared with the draft agreement, the final version raises a price floor for Mexican sugar imports by 2.43 cents to 26 cents per pound for refined sugar and by 1.5 cents to 22.25 cents per pound for other sugar.
The Commerce Department and Mexican governmental agencies have agreed to share information to enforce the agreements.
The American Sugar Alliance, which represents sugar producers, said in a press release the agreement should effectively prevent the problems that led to the filing of trade cases in the spring.
“Like our counterparts in Mexico, we want the (North American Free Trade Agreement) to operate as intended and to foster free and fair trade in sugar between the countries,” Phillip Hayes, a spokesman for the Alliance, said in the press release. “This settlement helps achieve that objective.”
The Sweetener Users Association, which represents sugar processors, has argued the agreement undermines core principles of NAFTA and dismantles the “unrestricted free trade of sugar between the U.S. and Mexico since 2008.”
In a press release, the association raised concerns about the precedent the agreement sets for other commodities. According to the association, market uncertainty stemming from the trade cases has cost American consumers $837 million in increased sugar prices from late March through the end of September.
“Due in large part to market uncertainty, U.S. sugar prices today are higher than world prices, and these suspension agreements only perpetuate the uncertainty,” the association’s press release reads.
Though domestic sugar prices have been strengthening, Aberdeen, Idaho, sugar beet farmer Dwight Horsch said they’re still “barely at break-even at best.”
Horsch expects to receive a little more than $40 per ton of raw sugar beets this year, compared with about $65 per ton a few years ago.
Source: www.capitalpress.com