US, Mexico nearing deal on sugar trade -Mexican economy minister

US, Mexico nearing deal on sugar trade -Mexican economy minister

Although the U.S. Commerce Department said that the agreement addresses the concerns of the U.S. sugar industry and prevents harm to other U.S. industries, including confectioners, beverage producers, and corn growers, that might have resulted if no agreement were reached, the U.S. sugar industry said it was unable to support the agreements at this time because of what it considers to be loopholes. "I encourage negotiators to work with our farmers to make improvements as the details of this agreement are finalized and as the changes are implemented". The deal is designed so Mexico will avoid punitive tariffs. But in the US, the price of sugar has been greater than in other parts of the world, sometimes two or three times more.

Price - The agreement increases the price at which raw sugar must be sold at the mill in Mexico, from 22.25 cents per pound to 23 cents per pound. This is meant to protect the USA sugar industry from harm caused by Mexico "dumping" sugar in the United States.

The US commerce chief noted that the "agreement in principle" has faced scepticism among some players in domestic industry, while pledging to continue talks with those businesses as the process to finalise the new "suspension agreement" continues. We must ensure that this deal will protect MI sugar beet farmers and the 142,000 jobs this vital industry supports across the country. This 2014 Suspension Agreement contained limits on the amount and type of Mexican sugar that could be imported each year.

"The new agreement prevents dumping of Mexican sugar and corrects for subsidies the Mexican sugar industry received", Ross said at a joint press conference with Mexico Economy Minister Ildefonso Guajardo Villarreal.

In addition, the share of refined sugar imported will be reduced from 53 percent to 30 percent, increasing the amount of raw sugar imports to 70 percent.

The five major elements of the agreement include price, the raw/refined split, purity/polarity, enforcement and additional US sugar needs.

Mexico agreed to increased enforcement and to accept significant penalties for violations. Most importantly, it significantly lowers the likelihood of one country retaliating against the other.

But complaints from U.S. sugar concerns continued, and Washington and Mexico City reopened talks a year ago.

However, the news of the agreement in principle was welcomed by the US Corn Refiners Association, which called it a "great day for American jobs". "In this Administration's first major negotiation with Mexico, Secretary Ross succeeded in protecting against unfair trade practices and maintained vulnerable export markets", said Bode. With both sides demanding more, he coolly pursued the broader public interest.

The American Sugar Alliance, in its own statement following the news, specifically flagged the "additional needs" component of the agreement announced Tuesday, calling it a "major loophole" that could be deeply damaging to the United States sugar sector. Consumers will then pay higher prices.

Ross listed several of the factors that trade agreement either didn't address or didn't go far enough in dealing with. "What the agreement does do is solidify that it's time for Congress to shoulder the responsibility of fixing this broken program in the 2018 farm bill if not before".

The Sweetener Users Association, which had already said the agreement will result in higher prices that will be detrimental to US candy, soda and other industries that use sugar, said, "It is ironic that after the administration conducted exhaustive negotiations with Mexico, and obtained virtually every demand of the USA domestic sugar industry, the sugar lobby still refuses to endorse the modifications".

He did not elaborate on what action the Commerce Department would take if there were no final agreement with the US producers.

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