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Controversy Resurfaces over Mexican Sugar Exports to U.S.

LADB Article ID: 80249
Category/Department: Mexico
Date: 2017-03-29
By: Carlos Navarro

The US-Mexico sugar trade agreement that went into effect more than two years ago has started to cause complications. According to the Mexican government, the problems might be related to an understaffed US Commerce Department, which has not provided timely information to help Mexico comply with the accord. The US established quotas on imports of Mexican sugar in late 2014, following a yearlong investigation that showed that Mexican sugar mills were flooding the US market with sugar at below-market prices. According to the investigation, production subsidies in Mexico resulted in increased production and eventually, in a surplus. The quotas were an alternative to a push by the US sugarcane industry to impose anti-dumping and countervailing duties. In 2014, The US and Mexico then negotiated an agreement that would allow the US Department of Commerce to set limits on imports of Mexican sugar based on data on US production collected by the US Department of Agriculture (USDA). Mexico complied with the agreement over the next two years, with the industry chamber (Cámara Nacional de las Industrias Azucarera y Alcoholera, CNIAA) establishing limits on the amount of sugar that each mill could export to the US. However, the CNIAA suddenly canceled all sugar-export permits for March at the beginning of the month because of concerns that Mexico would surpass the quotas set by the US during the 2016-2017 marketing year. If the quota had been surpassed, exports would have been subject to penalties.

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