WASHINGTON, Dec. 22, 2014 -- The Sweetener Users Association (SUA), a trade group representing U.S. candy and food makers, says the deal announced late last week that suspends the U.S. government’s antidumping and countervailing investigations into Mexican sugar imports undermines free trade and will result in higher sugar prices for consumers and businesses.
“With the stroke of a pen, these agreements dismantle the unrestricted free trade of sugar between the United States and Mexico since 2008 and undermine the core principles of the North American Free Trade Agreement (NAFTA), SUA said in a statement. “While sugar is but one commodity traded between our two countries, these suspension agreements set a horrible precedent by undoing trade flows that have been established over two decades after NAFTA was first negotiated.”
In announcing the agreements, the Commerce Department said they will allow Mexican sugar to enter the U.S market free of antidumping or countervailing duties. It also said that the deal will enable U.S sugar consumption needs to be met, while creating mechanisms to ensure that imports of Mexican sugar do not injure the U.S. sugar industry.
Commerce said the finalized agreements incorporate several changes from the draft suspension agreements the department initialed on Oct. 27. The changes, which include a revised definition of refined sugar and adjustments to the reference price, reflect comments that were submitted by interested parties in response to a request for public comment on the draft agreements.
Commerce had initiated the investigations in response to complaints filed by the U.S. sugar industry that it was being harmed by unfairly subsidized imports of Mexican sugar that was being dumped into the U.S. market at below the cost of production.
SUA said that between the time the U.S. sugar producers filed their petitions in March and the end of September, the “uncertainty surrounding the cases cost American consumers an additional $837 million and put in jeopardy thousands of U.S. manufacturing jobs.” Additionally, it said that due in large part to market uncertainty, “U.S. sugar prices today are higher than world prices, and these suspension agreements only perpetuate the uncertainty.”
The group said the agreements will limit the supply and raise the price of sugar from Mexico. “Given the new restraints on Mexican sugar, the pending Trans-Pacific Partnership (TPP) negotiations have become even more critical. Australia and Canada — TPP member countries that export sugar — will have to be provided the additional U.S. market access necessary to offset the loss of sugar previously available from Mexico,” SUA said.
The association also called for reform of U.S. sugar policy.
“Instead of further restricting market access and undermining free trade, what America needs is sugar reform. We will continue to make the case to Congress and the Administration that the American people cannot afford policies and agreements that continue to move U.S. sugar policy in the wrong direction.”
The American Sugar Alliance, which represents U.S. sugar producers, praised the agreement.
“The final suspension agreement should achieve U.S. sugar producers’ main goal by stopping Mexico from dumping subsidized sugar onto the U.S. market and violating U.S. trade law,” Phillip Hayes, a spokesman for the group, said in a statement.
“Like our counterparts in Mexico, we want NAFTA to operate as intended and to foster free and fair trade in sugar between the countries,” Hayes said. “This settlement helps achieve that objective.”
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