WASHINGTON, June 6, 2017 – The U.S. and Mexico today announced a preliminary agreement today on a new system to regulate the flow of Mexican sugar into the U.S., but the U.S. sugar refiners and farmers are not supporting the deal.
“We have gotten the Mexican side to agree to nearly every request made by U.S. industry to address flaws in the current system and ensure fair treatment of American sugar growers and refiners,” said U.S. Commerce Secretary Wilbur Ross.
Ross, who addressed reporters together with Mexican Minister of Economy Ildefonso Guajardo Villarreal, said Mexico has agreed send more refined and less raw sugar in the quota set for the country.
Mexico first agreed to the limit on its sugar exports as part of a “suspension agreement” in December 2014, after the U.S. threatened to levy stiff countervailing and anti-dumping duties. That limit effectively cut Mexican exports in half and dictated that only 53 percent could be refined product.
The U.S. needs to import sugar because demand is stronger than supply, but U.S. sugar refiners prefer those shipments be raw so that their mills can keep busy processing.
The U.S. informed Mexico last year that the suspension agreement needed to be changed substantially to reduce the amount of refined sugar it was shipping to the U.S.
The new agreement announced today requires that 70 percent of imports from Mexico be raw and allows the remaining 30 percent to be refined.
The U.S. sugar refining industry had been seeking an 85-15 split for raw and refined.
“Unfortunately, despite all of these gains, the U.S. sugar industry has said it is unable to support the new agreement, but we remain hopeful that further progress can be made during the drafting process,” Ross said today. “We look forward to continuing discussions with them as we finalize the agreement. We remain confident that this deal defends American workers across many industries and is the best way to ensure stability and growth.”
Ross said that he and Guajardo have both initialed the agreement, but there are still more details to be worked out in the coming days.
“In the drafting process we will try to work on issues that will make it easier for American industry to come on board,” Ross said.