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Dairy Facts 2016
 
 

Improve Mexican Suspension Agreements, Sweetener Users Say

Sep 21, 2016

The Sweetener Users Association (SUA), of which IDFA is a member, sent a letter to U.S. Secretary of Commerce Penny Pritzker this week detailing how the U.S.-Mexico suspension agreements have distorted the sugar market. SUA urged the Commerce Department to renegotiate the pacts to improve them. The letter also called on Congress to reform the U.S. sugar program in the 2018 Farm Bill.

The suspension agreements limit the amount of sugar that Mexican companies can export to the United States and require that sale prices reach specified minimums. IDFA and SUA oppose the agreements in their current form because they restrict the flow of sugar into the United States and are in contrast to the open markets provided for in the North American Free Trade Agreement.

“Although these agreements are preferable in theory to the antidumping and countervailing duties that would otherwise apply to Mexican sugar, the pacts badly need to be renegotiated and changed to encourage a more competitive marketplace,” SUA said in the letter. It explained that, in practice, the agreements create sugar price floors higher than the ones Congress voted for and distort the flow of raw and refined sugar from Mexico to the United States.

“We support renegotiating the deals—but to improve them, not make them even worse and further harm refiners and consumers,” SUA added.

SUA outlined its recommended revisions to the agreements, including:

  • Reducing the minimum prices in the agreements to the support prices established by Congress in law, and rejecting any calls for further increasing these prices;
  • Increasing the restrictive stocks-to-use target in the current agreements to ensure adequate supplies;
  • Increasing the amount of raw sugar Mexico is required to ship to the United States; and
  • Holding a public comment period on any changes before they are proposed in discussions with the Government of Mexico, so that U.S. food companies and other stakeholders who will be directly affected have a chance to make their views known.

For more information, contact Beth Hughes, IDFA director of international affairs, at bhughes@idfa.org.  

 
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