June 5, 2017
Today marks the deadline for American and Mexican producers to come to an agreement over claims of Mexico dumping sugar into the United States market. If an agreement is not reached, the consequences could be dire.
Sugar beet and cane farmers in the United States continue to struggle, costing U.S. sugar farmers about $4 billion dollars over the past four years.
This struggle started with Mexico violating U.S. trade laws. In 2013, Mexico released an enormous amount of sugar on the U.S. market. The impact resulted in the U.S. government imposing duties of up to 80% to counter the Mexican violation. Talks to resolve this issue (which did not begin until 2016) failed to solve the problem. The Department of Commerce then declared it would implement a 45% tariff on sugar coming in from Mexico on June 5, 2017.
Negotiations have so far been unsuccessful, and the Mexican Embassy has not returned RFD-TV’s quest for comments. If a solution is not reached, U.S. farmers and consumers might both lose. Mexican producers, food manufacturers and grocers are all benefiting from paying lower prices, but charging consumers the same if not more.
These talks could be a bellwether for upcoming North American Free Trade Agreement negotiations, indicating whether U.S. and Mexican officials can reach a compromise on such a sensitive issue in this charged political climate.
Major corn syrup producers, Archer Daniels Midland and Cargill, warn of a potential fall-out if the U.S. moves forward with penalties on Mexican sugar. Mexico buys 80% of high fructose corn syrup exports and could target the sweetener with retaliatory tariffs.