WASHINGTON, Aug. 3, 2016 - Sen. Mike Crapo, a co-chair of the Senate Sweetener Caucus, is urging U.S. officials to work with the Mexican government to fix import agreements that the sugar industry says are broken, resulting in tons of subsidized sweetener being dumped into the U.S. market.
“Mexico has pursued creative means of circumventing the 18-month-old suspension agreements,” the Idaho Republican told attendees at the American Sugar Alliance’s 33rd International Sweetener Symposium in Coeur d’Alene, Idaho, on Tuesday.
“The suspension agreements are not working, and Mexico and Mexican sugar producers are still effectively dumping subsidized sugar into the United States,” Crapo said
Mexico had promised to clean up its export act in 2014 after the U.S. Commerce Department found the country’s sugar industry guilty of pushing subsidized sweetener into the U.S. market at below the cost of production, harming American producers. As a result, the U.S. agreed to suspend retaliatory tariffs against Mexico as high as 80 percent.
ASA economist Jack Roney said the association is considering formally asking Commerce to terminate the “suspension agreements” and reinstate the tariffs, effectively suspending any Mexican shipments into the U.S.
“We see it as a way to get Mexico’s attention,” Roney said in an interview, adding that ASA believes both governments understand the gravity of the situation.
Crapo said action is needed to protect a $20 billion industry that directly or indirectly supports more than 140,000 U.S. jobs. “It’s incumbent upon our government to crack down on unfair trade practices and ensure the suspension agreements with Mexico are properly executed and upheld,” he said.
The sugar that Mexico is shipping to the U.S. is also helping to push U.S. prices near the government’s minimum support price. That could result in processors paying off loans from the government in collateralized sugar, and costing U.S. taxpayers millions of dollars. The only time that has happened was in 2013, when forfeitures cost the government an estimated $258 million.
That in turn could give critics of U.S. sugar policy – which is designed to operate cost-free to taxpayers -- more ammunition in their calls for reform during debate for the 2018 farm bill.
“I doubt that will happen,” said Roney, but he said ASA is in the process of drawing up its petition in case negotiations fail.
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