FARGO, N.D. -- The U.S. International Trade Commission on March 19 upheld agreements between the U.S. and Mexican governments designed to stop subsidized Mexican sugar from being dumped on the U.S. market.
The ITC voted 6-0 to turn back a challenge by two U.S. companies that didn't like the agreements finalized on Dec. 19.
In late March 2014, the U.S. sugar industry accused Mexico of subsidizing and dumping sugar below U.S. market prices. That led to penalties, but then a suspension agreement was established that set quotas and minimum sales prices.
Louis Dreyfus Commodities of Geneva, Switzerland, which owns U.S.-based Imperial Sugar Co. in Savannah, Ga., and AmCane Sugar LLC, of Taylor, Mich., on Jan. 8 asked for the review of the suspension agreement, saying it unfairly limits the raw sugar supplies used in their plants. In recent years, much of the raw sugar imported into the U.S. is from Mexico.
This was the first time a minority part of an industry had challenged such a suspension agreement with the ITC, and if successful, would have required the ITC and the Department of Commerce to go forward with penalties, and a further investigation of subsidy findings.
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The unanimous ITC vote says the suspension agreement will stand, but the ITC won't offer a full explanation for the reasoning until April.
The American Sugar Alliance, which supports the pact, says ITC's decision is correct.
American Crystal Sugar Co. of Moorhead, Minn., declined comment on the decision.
The 2013 Mexican imports added 1 million tons to the U.S. market, forcing the U.S. government to spend $259 million to remove sugar from the markets, which cost $1 billion in lost revenue to beet and cane industries. It also had a political cost because the U.S. sugar proponents bill their loan program as a "no-cost" policy, in the absence of a foreign predatory trade competitor.
Phillip Hayes, spokesman for the ASA, says, "U.S. sugar producers are pleased with the ITC vote. The carefully negotiated suspension agreements are supported by the U.S. and Mexican governments and by U.S. and Mexican sugar producers. And we believe the agreements will benefit U.S. sugar farmers, workers, consumers and taxpayers alike.
"Like our counterparts in Mexico, we want (the North American Free Trade Agreement) to operate as intended and to foster free and fair trade in sugar between the countries," Hayes adds. "The suspension agreements upheld today by the ITC will help accomplish that goal."
