The U.S. International Trade Commission affirmed Oct. 20 that the dumping of subsidized Mexican sugar hurt the U.S. market, meaning an agreement previously reached between the two nations to resolve the issue will remain in place.
“That’s really good news for our industry,” said Jack Roney, an economist with the American Sugar Alliance.
The ITC’s unanimous vote follows a Sept. 16 decision by the U.S. Department of Commerce significantly expanding previous estimates of the subsidy levels of Mexican sugar.
The department concluded Mexican sugar subsidies were as high as 44 percent, and Mexican sugar was sold on the U.S. market at dumping margins of at least 42 percent.
U.S. sugar producers raised the claims in March of 2014 when they filed trade cases against Mexico. The trade cases resulted in the establishment of temporary duties on Mexican sugar, which had been allowed into the U.S. duty-free under the North American Free Trade Agreement.
The tariffs were refunded once the nations reached a tentative agreement in October of 2014, which was finalized that December. The “needs-based” trade agreement will now remain in place for at least five years, though it could have been nullified had ITC or Department of Commerce instead ruled against the U.S. sugar producers’ claims.
The final agreement sets an export limit for Mexico based on USDA demand data and contains provisions to prevent imports from Mexico during certain times of the year. It also caps exports of refined sugar to the U.S. at 53 percent of total Mexican sugar exports and sets a price floor for Mexican sugar at 26 cents per pound for refined sugar and 22.25 cents per pound for other sugar.
“U.S. sugar producers want NAFTA to operate as intended and to foster free and fair sugar trade between Mexico and the U.S.,” Sugar Alliance spokesman Phillip Hayes said in a press release. “Today’s ruling helps accomplish that goal by upholding the governments’ agreement and addressing the unfair trade practices that were injuring American farmers, workers and taxpayers.”
The Sweetener Users Association, which represents large sugar buyers, issued a statement concluding ITC “missed a key opportunity to do the right thing for American consumers, taxpayers and businesses.”
“The temporary decline in U.S. sugar prices in the 2012-2013 an 2013-2014 crop years was attributable to the United States’ failed sugar policy, excess supply in the combined U.S.-Mexican sugar sector and the normal working of commodity markets — not to imports from Mexico,” the Sweetener Users said.
The sugar buyers vowed to “redouble” efforts to reform U.S. sugar policy.