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U.S., Mexico Reach Deal to Avoid New AD/CV Duties on Sugar Imports

Wednesday, October 29, 2014
Sandler, Travis & Rosenberg Trade Report

The Department of Commerce announced Oct. 27 that it has initialed draft agreements with the government of Mexico and Mexican sugar exporters that would suspend its antidumping and countervailing duty investigations of Mexican sugar. Assistant Secretary of Commerce for Enforcement and Compliance Paul Piquado said DOC believes that these agreements, which work in concert with the U.S. sugar program, “effectively address the market-distorting effects of any unfairly traded sugar.”

Highlights of the draft agreements include the following.

- Mexican sugar would continue to enter the U.S. market without the payment of AD or CV duties. DOC’s preliminary affirmative AD and CV determinations have set dumping margins at 39.54 percent to 47.26 percent and net countervailable subsidies at 2.99 percent to 17.01 percent.

- The CV 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.

- Imports could not be concentrated during certain times of the year.

- The amount of refined sugar that may enter the U.S. market would be limited.

- Minimum price mechanisms ($0.2357/lb. for refined sugar and $0.2075/lb. for raw sugar) would be established to guard against undercutting or suppression of U.S. prices.

DOC states that interested parties may comment on the texts of the proposed suspension agreements through Nov. 10. If final agreements are signed, which may occur no earlier than Nov. 26, the AD and CV duty investigations on Mexican sugar would be suspended, cash deposits would be refunded to importers and no final determinations would be issued. If the final agreements are not signed, DOC and the International Trade Commission will continue their respective investigations and could ultimately issue AD and/or CV duty orders.

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