Vilsack Fears Sugar Antidumping Case Could Complicate Relations with Mexico

The U.S. has been negotiating with Mexico on a variety of agricultural issues. Most recently – Mexico agreed to accept U.S. potato imports. The country is also importing large amounts of high fructose corn syrup from the United States.  Reports are that during a House Ag Committee hearing last week – Ag Secretary Tom Vilsack told lawmakers he fears the legal case U.S. sugar producers have filed asking for corrective action could affect other negotiations with Mexico. Vilsack says he has a positive relationship with Mexican officials and doesn’t want to jeopardize that relationship – and Mexican officials have expressed their unhappiness with the U.S. to him. Vilsack was quoted as saying “Ideally, I would like to have seen this case take place at a different time…. or perhaps, not at all”. The Secretary cited Mexico’s diversion of 700,000 mt of sugar that was originally meant for the U.S. to other destinations as an example of how the government is trying to improve the problem.
American Sugar Alliance spokesman Philip Hayes says the action by the Mexican government was temporary and too little, too late. Hayes says the case is designed to force the government to enforce U.S. law against subsidized imports. Under NAFTA – Mexico has the right to ship unlimited amounts of sugar to the U.S. – but other trade laws say the shipment of subsidized sugar is illegal.  According to a press release issued by the American Sugar Alliance, NAFTA:

“gives Mexico the right to export sugar to the United States on a tariff-free and quota-free basis—but that does not give the Mexican       industry the right to export its surplus to the U.S. market at dumped prices, nor does it permit the [Mexican government] to subsidize its sugar industry without regard to the impact of those subsidies on U.S. producers”

NAFTA explicitly permits the filing of antidumping and countervailing duty cases, and NAFTA countries have filed 114 antidumping and countervailing duty cases against each other since the trade deal went into effect. Of these 114 cases, Mexico has filed 31 cases against the United States, and the United States has filed 30 cases against Mexico, not counting the pending sugar petitions.