The US and Mexico reached an agreement Tuesday to resolve a long-standing dispute and allow duty-free sugar imports to resume from south of the border, albeit with new conditions.
US Commerce Secretary Wilbur Ross said the new deal will “address the flaws in the current system” and protect American sugar refiners, confectioners and soft drink makers from harm caused by imports of subsidized Mexican sugar.
“The new agreement prevents dumping of Mexican sugar and corrects for subsidies the Mexican sugar industry received,” Ross said at a joint press conference with Mexico Economy Minister Ildefonso Guajardo Villarreal.
However, he said the US sugar industry does not support the new deal.
US sugar producers have protested the amount of cheap sugar pouring across the border, accusing Mexico of subsidizing its sugar industry, then dumping the excess product.
Washington had threatened to slap tariffs of up to 80 percent on Mexican sugar unless a deal was reached. Guajardo said the new deal, which increases the set price for raw and refined sugar and increases the share of raw sugar exports, “protects Mexican companies and workers” and “maintains Mexico’s position as the main supplier” to the US market.
The dispute comes as the two neighbors, along with Canada, are set to renegotiate the North American Free Trade Agreement (NAFTA), and the officials indicated the negotiations on sugar over the past several weeks should help with those talks.
“We needed to get out of the way this very contentious issue that has been polluting the relationship between the two countries for quite some time,” Ross told reporters.
“I think it is important to get a very hard issue like that out of the way before the big negotiations start.”
And both Ross and Guajardo said work on the sugar deal has strengthened their working relationship and showed they could reach a mutually beneficial agreement.
The deal will increase the import price to 23 cents a pound of raw sugar from 22.25 cents and for refined sugar to 28 cents a pound from 26 cents.
In addition, the share of refined sugar imported will be reduced to 30 percent from 53 percent, increasing the amount of raw sugar imports to 70 percent.
In addition, Mexico was granted “right of first refusal” to supply any excess US demand, as determined each year by the US Department of Agriculture (USDA).
The USDA monitors the market and US production and allocates an additional quota of imports as needed. It did so this year — calling for an additional 40,000 tons — and in 2016, but prior to that there were three years when no additional imports were allowed.

Source: Arab News