The U.S. International Trade Commission on Oct. 20 in its final determination on agreements suspending the antidumping and countervailing duty investigations of Mexican sugar imports ruled 6 to 0 that harm to the U.S. sugar industry from imports of sugar from Mexico were eliminated by Dec. 19, 2014, suspension agreements signed by the U.S. Department of Commerce, Mexican sugar exporters and the government of Mexico.
The D.O.C. concluded its inquiry on Sept. 16 (made public Sept. 17) finding that Mexico’s sugar industry had benefited from subsidy rates up to 44% and had shipped sugar to the United States at dumping margins of more than 42%. The Oct. 20 ruling that those actions were materially injurious to the U.S. sugar industry concludes the I.T.C.’s examination of the case. A detailed report from the I.T.C. is due by Nov. 2.
Today’s I.T.C. ruling means the suspension agreements will remain in effect for at least five years.
“The I.T.C. missed a key opportunity to do the right thing for American consumers, taxpayers and businesses,” the Sweetener Users Association said. “The idea that domestic producers were suffering at a time when they made record profits is confounding. What is clear, however, is that the temporary decline in U.S. sugar prices in the 2012-13 and 2013-14 crop years was attributable to the United States’ failed sugar policy, excess supply in the combined U.S.-Mexican sugar sector and the normal working of commodity markets — not to imports from Mexico. In fact, changes made to the sugar program in the 2008 farm bill caused U.S. sugar prices to soar well above the already high world prices between 2009 and 2012. High profits in turn incentivized U.S. domestic producers, as well as Mexican producers, to increase their share of the U.S. sugar market.”
“While today’s decision is unfortunate, S.U.A. and sugar-using industry representatives will redouble our efforts to work with Congress to enact meaningful sugar program reform,” the Sugar Users Association said.
U.S. sugar producers said the I.T.C. ruling, which was expected by most in the industry, validated their claims against Mexican sugar export practices.
“U.S. sugar producers want NAFTA (the North American Free Trade Agreement) to operate as intended and to foster free trade and fair sugar trade between Mexico and the United States,” said Phillip Hayes, spokesman for the American Sugar Alliance, which represents U.S. sugar producers. “Today’s ruling helps accomplish that goal by upholding the governments’ agreement and addressing the unfair trade practices that were injuring American farmers, workers and taxpayers.”
Mr. Hayes said the vote “validates the serious claims made by sugar producers when they first filed cases against Mexico in March 2014.” The I.T.C. and D.O.C. launched antidumping and countervailing duty investigations shortly after those cases were filed by U.S. producers.
Under the suspension agreements, Mexico is given a sugar export quota based on maintaining a U.S. ending stocks-to-use ratio of 13.5%, and includes minimum prices and other restrictions.
