The U.S. and
Mexican governments reached a new agreement to significantly shift their
sugar trade mix, but U.S. sugar producers have failed to endorse the
deal, leaving question marks over whether it could still sour broader
Commerce Secretary Wilbur Ross said the “agreement in principle” with
Mexican Economy Minister Ildefonso Guajardo calls for Mexico to reduce
the share of refined sugar in its exports to the United States, while
increasing the share of raw sugar.
He said Mexico met nearly every request by the U.S. sugar industry to fix problems with a 2014 sugar trade agreement.
despite all of these gains, the U.S. sugar industry has said it is
unable to support the agreement in its present form,” Ross said without
elaborating on their objections.
added that the agreement would go through a final drafting stage in
which he hoped that the U.S. producers could come on board with it.
Asked how long this would take, Ross said, “It should be days, not weeks or months.”
deal cut by Ross and Guajardo leaves Mexico’s overall access to the
U.S. sugar market unchanged but refined sugar must fall to 30 percent of
overall imports from Mexico from a previous limit 53 percent.
also lifts the U.S. price paid for Mexican raw sugar to 23 cents per
pound from 22.25 cents, while, the price for refined sugar will rise to
28 cents per pound from 26 cents. These prices exclude shipping and
packaging costs, the Commerce Department said in a summary.
agreement was expected to help avoid potential retaliation from Mexico
on imports of U.S. high-fructose corn syrup, a trade battle that would
heighten U.S.-Mexico tensions as both countries along with Canada
prepare to begin renegotiating the 23-year-old North American Free Trade
Agreement in August.
on Monday extended the deadline for the negotiations by 24 hours to
complete what he called “final technical consultations” for a deal.
on both sides of the border said on Monday that the U.S. sugar industry
had added new demands outside of the terms agreed on earlier in the day
by the two governments.
refiners have complained that high-quality Mexican raw sugar was going
straight to sugar consumers, rather than passing through U.S.
The deal would mark the culmination
of a years-long dispute between the countries over sugar, after U.S.
groups three years ago asked the government for protection from dumping
of subsidized imports from Mexico. In 2014, the U.S. government
slapped large duties on Mexican sugar but hammered out a deal with
Mexico that suspended those levies. Factions of the U.S. industry have
said that the deal has failed to eliminate harm from Mexican imports.
U.S. industry involved in the dispute include a coalition of cane and
beet farming groups as well as ASR Group, the maker of Domino Sugar that
is owned by the politically connected Fanjul family.
and fellow cane refiner Imperial Sugar, owned by commodities firm Louis
Dreyfus Company BV [AKIRAU.UL], have said they are being starved of raw
supplies under the current deal. They have asked the U.S. government to
terminate the pact.
latest talks began in March, two months after U.S. President Donald
Trump took office vowing a tougher line on trade to protect U.S.
industry and jobs.