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Sugar growers praise Mexico agreement; users express concern

The American Sugar Alliance praised the agreement between the Mexican and U.S. governments to place limits on Mexican sugar shipments to the U.S. and to suspend the antidumping and countervailing duty investigations of sugar from Mexico. But the ...

The American Sugar Alliance praised the agreement between the Mexican and U.S. governments to place limits on Mexican sugar shipments to the U.S. and to suspend the antidumping and countervailing duty investigations of sugar from Mexico. But the Sweetener Users Association said it was "deeply concerned" about the agreement.

"U.S. government officials should be commended for their hard work and diligence in reaching an agreement with the Mexican government that could serve as the basis for suspending the pending countervailing duty and antidumping duty cases," said Phillip Hayes, a spokesman for the American Sugar Alliance, which represents cane and beet growers.

"We believe that U.S. sugar producers and consumers alike will benefit if an agreement is finalized. Like our counterparts in Mexico, we want NAFTA [the North American Free Trade Agreement] to operate as intended and to foster free and fair trade in sugar between the countries."

ASA added, "The agreement does not reopen or undermine NAFTA, and it will not require any changes to U.S. sugar policy in the recently passed farm bill."

The Sweetener Users Association, which represents the candy companies and other industrial users of sugar, said it was "deeply concerned about the implications of the proposed suspension agreements for the U.S. sugar market, American consumers and manufacturers."

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"The uncertainty surrounding the antidumping and countervailing duty petitions filed by U.S. sugar producers has already driven up U.S. sugar prices -- costing consumers an additional $837 million since April and jeopardizing thousands of American manufacturing jobs in the process," the group said in a statement.

"If the draft agreements between the United States and Mexico are adopted, we can expect the same market uncertainty that is causing unduly high U.S. sugar prices now. That uncertainty will mean American consumers and U.S. sweetener users, including food and beverage manufacturers, will be forced to spend more for sugar," the group said.

"While we are reviewing the details of the agreements to evaluate their full impact, at this stage, we caution all parties and both governments to consider the ramifications of entering into a managed trade agreement on sugar," the Sweetener Users said.

"In recent years, the United States has imported 2 to 2.1 million tons of sugar from Mexico, and as part of both governments' commitments under the North American Free Trade Agreement, there has been free trade in sugar since early 2008. Entering into a managed trade agreement would not only set a bad precedent for our bilateral trade relationship, it would move America's already protectionist sugar policy in the wrong direction, farther away from a free market approach."

The Commerce Department's International Trade Administration announced Oct. 27 that it had made a "preliminary determination" that Mexico had dumped sugar in the U.S. and confirmed duties it had imposed on Aug. 26, but that the antidumping and countervailing duty investigations would be suspended under draft agreements that officials of both governments had initialed.

The release from the Commerce Department also included a statement from Mexican Assistant Secretary of Commerce for Enforcement and Compliance Paul Piquado, who initialed the drafts, in which he praised the agreements for resolving the U.S. industry's concerns regarding unfairly traded imports while allowing stable trade between Mexico and the United States.

"We believe these agreements, which work in concert with the U.S. sugar program, effectively address the market-distorting effects of any unfairly traded sugar," Piquado said.

The Commerce Department noted in a news release that the investigations were initiated in April 2014, after U.S. sugar growers filed petitions alleging that it was injured by unfair pricing and government subsidies on Mexican sugar.

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But Commerce said "The suspension agreements initialed today will, if finalized, suspend the investigations, allowing Mexican sugar to continue to enter the U.S. market without antidumping or countervailing duties. The agreements create mechanisms to ensure that unfairly traded imports of Mexican sugar do not cause injury to U.S. sugar producers."

Commerce has released draft texts of the initialed suspension agreements and set a 30-day public comment period, after which the agreements can be finalized.

"The countervailing duty 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," Commerce said in the news release. "The agreements will also prevent imports from being concentrated during certain times of the year, limit the amount of refined sugar that may enter the U.S. market, and establish minimum price mechanisms to guard against undercutting or suppression of U.S. prices."

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