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US, Mexico Reach Deal on Sugar Imports

US, Mexico Reach Deal on Sugar Imports
Department of Commerce announces draft agreements to end antidumping and countervailing duty investigations on Mexican sugar imports

The U.S. Department of Commerce Monday said it has initialed draft agreements with the Government of Mexico and Mexican sugar exporters that, if approved, 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.

Department of Commerce announces draft agreements to end antidumping and countervailing duty investigations on Mexican sugar imports

If the suspension agreements are finalized, they will suspend 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.

Related: Sugar Imports May Cost U.S. Producers $1 Billion

The Department of Commerce has released draft texts of the initialed suspension agreements for a 30-day public comment period, after which the agreements can be finalized.

According to Stefan Selig, Under Secretary of Commerce for International Trade, the agreements should provide stability in the sugar market while also ensuring that farmers and sugar refiners in the United States have an opportunity to compete on a "level playing field."

Phillip Hayes, a spokesman for the American Sugar Alliance, agreed that U.S. and Mexican farmers will benefit.

"U.S. government officials should be commended for their hard work and diligence in reaching an agreement with the Mexican government that could serve as the basis for suspending the pending countervailing duty and antidumping duty cases," he said Tuesday. "Like our counterparts in Mexico, we want NAFTA to operate as intended and to foster free and fair trade in sugar between the countries."

A preliminary determination in the countervailing duty investigation released on Aug. 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 Monday. 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.

"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," Piquado said.

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 Commerce Department said.

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.

Source: U.S. Department of Commerce

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