The U.S. Department of Commerce announced Oct. 27 that it initialed draft agreements with the Government of Mexico and Mexican sugar exporters that, if finally adopted, would suspend antidumping and countervailing duty investigations of imports of Mexican sugar.
The investigations were initiated by Commerce in April 2014, after the U.S. sugar industry filed petitions alleging that it was injured by unfair pricing and government subsidies on Mexican sugar.
If finalized the agreement suspends 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 for 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. 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.
“I am pleased that we were able to reach agreement in this important matter,” said Stefan Selig, under secretary of Commerce for International Trade. “The agreements should provide critical stability in a market that is important to both countries, while also ensuring that farmers and sugar refiners in the United States have an opportunity to compete on a level playing field.”
A preliminary determination in the countervailing duty investigation released on August 26, found countervailable subsidies and imposed preliminary duties ranging from 2.99 to 17.01%. Commerce announced its affirmative preliminary determination in the antidumping duty investigation. If these agreements are finalized, the investigations will be suspended and no antidumping or countervailing duties will be imposed.
Assistant secretary of Commerce for Enforcement and Compliance Paul Piquado, who initialed the drafts, 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. 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.
“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,” Assistant Secretary Piquado said.
Phillip Hayes, a spokesman for the American Sugar Alliance, said ASA believes that U.S. sugar producers and consumers alike will benefit if an agreement is finalized.
“Like our counterparts in Mexico, we want NAFTA to operate as intended and to foster free and fair trade in sugar between the countries,” Hayes said.