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U.S. and Mexico Working to Resolve Issues Affecting Bilateral Sugar Trade

Tuesday, March 14, 2017
Sandler, Travis & Rosenberg Trade Report

U.S. Commerce Secretary Wilbur Ross and Mexican Secretary of Economy Ildefonso Guajardo announced March 10 a renewed effort to resolve ongoing issues over Mexican sugar exports and anti-bunching limits. The two sides last held a round of talks on this matter in mid-December 2016 and have now agreed to hold additional discussions in an attempt to reach a mutually-acceptable resolution of the serious issues that have been identified with the current arrangement.

A Department of Commerce press release observes that these difficulties date back to April 2014 when the agency initiated antidumping and countervailing duty investigations on Mexican sugar. In December 2014, the DOC entered into suspension agreements with the government of Mexico and Mexican sugar producers that suspended these investigations in exchange for Mexico limiting its exports and imposing minimum export prices on sugar sold to the U.S. However, alleged flaws in the suspension agreements that the two sides have been trying to correct for months have resulted in a shortage of raw sugar supplies and price suppression in the refined sugar market.

The most recent problem arose when sugar exports from Mexico to the U.S. were suspended after reaching the agreed to export ceiling. According to the DOC, Mexican sugar producers acted quickly to halt their shipments under the suspension agreements once they identified that a temporary limit had been reached.

The DOC is currently conducting an administrative review of the suspension agreements and Secretary Ross announced that the deadline to conclude the review has been extended from April 4 to May 1, thereby allowing negotiators more time to reach a deal.

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