THE U.S. International Trade Commission (ITC) determined that there is a reasonable indication that U.S. industry has been materially injured by imports of sugar from Mexico that are allegedly subsidized and sold in the U.S. at less than fair value.
U.S. sugar producers filed antidumping and countervailing duty petitions with ITC in March claiming that Mexico's actions will cost the industry $1 billion this year. The petitions further note that efforts by U.S. government officials to keep the market from collapsing under the surge of subsidized Mexican imports cost taxpayers $278 million in fiscal 2013.
The ITC vote of 5-0, with one commissioner not participating, comes on the heels of an April 18 announcement by the U.S. Department of Commerce that it will investigate Mexico's sugar industry amid strong evidence of sugar dumping and subsidization.
As a result of ITC's affirmative determinations, DOC will continue to conduct its investigations on imports of sugar products. Its preliminary countervailing duty determination is due around June 23, and preliminary duties could be levied at that time.
DOC plans to make its antidumping duty determinations by Sept. 4, ITC said in a ruling issued May 9. Final rulings by DOC and ITC may not occur until 2015.
"The ITC made the right decision and validated our complaints," Phillip Hayes, a spokesman for the American Sugar Alliance (ASA), said. "Mexico's actions have harmed hardworking sugar producers as well as taxpayers. U.S. trade laws are designed to stop such injury, and we hope corrective actions will be taken soon, before the situation deteriorates."
Mexico's sugar industry — 20% of which is owned and operated by the Mexican government — has ramped up exports to the U.S. in recent years, rising from 9% of the U.S. market in fiscal 2012 to nearly 18% in fiscal 2013. Mexican sugar acreage and production has likewise expanded significantly in recent years.
ASA said U.S. sugar prices have fallen 50% since late 2011, forcing U.S. producers to plant fewer acres of sugar beets for the fourth consecutive year.
In a statement, Mexico's Economy Ministry acknowledged the U.S. probe and said it would offer legal and technical assistance to Mexican sugar producers.