Mexico on Wednesday rejected a US move to slap duties on sugar imports from its southern neighbour, calling it a setback for free trade. The US Commerce Department Tuesday announced a preliminary decision imposing duties of three to 17 percent on the sugar imports to offset what it said were government subsidies to Mexican sugar producers.
"It's a decision we reject," Mexican Foreign Trade Under Secretary Francisco de Rosenzweig told Radio Formula. Rosenzweig said Mexico supports its sugar producers only when prices fall below an established range, and insisted "no subsidies are granted." The measure is "a setback in the spirit of free trade" established under the 1994 North American Free Trade Accord between Mexico, the United States and Canada.
The Mexican economy ministry has also voiced its regrets over the US action, which it said was prompted by "unjustified" lawsuits filed by the US sugar industry. "There are better and more collaborative ways to resolve differences that might arise in the North American sweetener market," it said. A definitive US decision on the issue is expected in the first half of 2015, according to the Mexican authorities.
The United States will slap anti-subsidy import duties on Mexican sugar, sources said on Tuesday, a move that could push up candy and soft drink prices for US consumers and incite retaliation from Mexico on other products. The duties, if confirmed, will bolster prices for US sugar but mean companies like candy makers Hershey Co and Mondelez International Inc will have to pay more for imported sweetener.
The preliminary decision to slap duties on sugar imports from Mexico, which could still be overturned, is backed by US sugar industry complaints of unfair competition from subsidised sweeteners in the industry's first trade case in decades. Sources told Reuters the duties were as much as 17.01 percent. The preliminary determination means the US Department of Commerce found Mexican imports benefited from government support. US sugar producers have claimed cheap imports from Mexico are causing nearly $1 billion in damages in the local market.
