The U.S. Department of Commerce announced Monday that it initialed draft agreements with the Government of Mexico and Mexican sugar exporters that would suspend antidumping and countervailing duty investigations of imports of Mexican sugar. The agreements create mechanisms that would ensure that imports of Mexican sugar do not cause injury to U.S. sugar producers and would allow Mexican sugar to continue to enter the U.S. market without antidumping or countervailing duties.

IDFA is concerned that the proposed managed trade agreements would cause unduly high U.S. sugar prices and could jeopardize thousands of manufacturing jobs. According to the Sweetener Users Association, market uncertainty stemming from the petitions filed by U.S. sugar producers has already cost consumers an additional $837 million since the Department of Commerce began its initial investigations in April.

Agreements Run Counter to Objective of TPP

IDFA and other members of the Coalition for Sugar Reform believe this managed trade agreement also would run counter to the shared objective of completing a comprehensive Trans-Pacific Partnership (TPP) agreement.

“U.S. negotiators likely would have a difficult time demanding comprehensive access for U.S. exports to the markets of all TPP partners if the United States rolled back some of the trade liberalization enacted in the North American Free Trade Agreement with Mexico and Canada,” said Clay Hough, IDFA senior group vice president.  

The Department of Commerce initiated investigations after the U.S. sugar industry filed petitions alleging that it was injured by unfair pricing and government subsidies on Mexican sugar. The department released a preliminary determination in the countervailing duty investigation in August that imposed preliminary duties ranging from 2.99 percent to 17.01 percent. If the suspension agreements are finalized, the investigations will be suspended and no antidumping or countervailing duties will be imposed.

Finalization of these suspension agreements would also stop any investigation by the U.S. International Trade Commission into injury of the U.S. domestic market by Mexican imports.

• Agreement Suspending the Countervailing Duty investigation on Sugar from Mexico

• Agreement Suspending the Antidumping Duty investigation on Sugar from Mexico

The countervailing duty agreement contains provisions to ensure there is not an oversupply of Mexican sugar that could cause price declines that threaten the U.S. industry and farmers. The agreements also will prevent imports from being concentrated during certain times of the year, limit the amount of refined sugar that may enter the U.S. market and establish minimum price mechanisms to guard against undercutting or suppression of U.S. prices.

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