Sugar suspension pact changes may determine TPP course
COEUR D'ALENE, Idaho -- The outcome of the Obama administration's negotiations with Mexico over changes to the suspension agreements on Mexican sugar access to the United States may determine whether Congress is willing to approve the Trans-Pacif...
COEUR D’ALENE, Idaho - The outcome of the Obama administration’s negotiations with Mexico over changes to the suspension agreements on Mexican sugar access to the United States may determine whether Congress is willing to approve the Trans-Pacific Trade Partnership agreement, Sen. Mike Crapo, R-Idaho, said here today.
Other countries have avoided compliance with past trade agreements, which has “soured” a lot of Americans on new trade agreements and the North American Free Trade Agreement sugar provisions are an example of that, Crapo said in a speech to the International Sweetener Symposium, a meeting of the American Sugar Alliance, which is composed of beet and cane growers.
Crapo told The Hagstrom Report that he has not decided how he would vote on the TPP. Idaho is a major beet sugar producing state.
“The farm community has been generally supportive of the [TPP]” Crapo noted, but he added that “with the sugar industry there has been some caution.”
NAFTA gives Mexico the right to export unlimited amounts of sugar to the United States, but not the right to subsidize those exports or to dump sugar at low prices.
In 2014, U.S. sugar growers filed antidumping and countervailing duties cases against Mexico with the U.S. government. Rather than allow the cases to proceed, which would have resulted in the imposition of punitive tariffs, Mexico agreed to limit its sugar exports to the United States.
But the United States expected Mexico to ship raw sugar to the United States so that U.S. cane refiners would have the raw materials they need. Instead Mexico has shipped sugar that is not considered fully refined but is refined enough that it can be used without going through cane refiners. The result has been a continuing shortage for cane refiners and, because users buy the partially refined sugar, a glut of U.S. beet sugar.
U.S. and Mexican officials have been meeting to try to make changes to the suspension agreements but those negotiations have not been finished.
The International Trade Commission found that Mexico had “abused” its access to the U.S. market, Crapo said.
After entering into the agreements “to avoid retaliatory tariffs ... Mexico has used creative means” to circumvent the agreements, he added.
“How the government handles the Mexican suspension agreements may be a bellwether for other trade actions in Congress,” Crapo said.
The vote on Trade Promotion Authority, which gave Obama and his negotiators the power to negotiate on TPP and other agreements, was “very close in the House” and “hard in the Senate,” Crapo noted, and it also gave the executive branch more detailed orders on what Congress expects to be in the agreements than previous TPA bills have provided.
Members of Congress are now examining TPP to see if negotiators have fulfilled those orders, Crapo said.