US, Mexico Agree on Sugar Suspension Deal, Commerce Halts AD/CVD Investigations
The Commerce Department signed a deal with the Mexican government on Dec. 19 to suspend its antidumping and countervailing duty investigations on sugar from Mexico, it said in a fact sheet on Dec. 19 (here). As a result, Commerce will no longer issue final antidumping or countervailing duty determinations in the case.
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Under the deal, Commerce will impose a limit on Mexican sugar exports to the U.S. after calculating U.S. sugar needs, and also limits the amount of refined sugar that enters the U.S. Only 53 percent of total Mexican sugar exports to the U.S. are now permitted to be refined. The two sides also agreed to put measures in place to prevent Mexico from flooding the U.S. market at specific times of the year. The antidumping portion of the deal also establishes minimum prices for Mexican exports in order to safeguard U.S. sugar prices. The minimum prices are $0.26 per pound of refined sugar and $0.2225 for all other sugar. The Mexican government will allocate quotas for Mexican companies to fill the amount of sugar Mexico is approved to export to the U.S.
The countries negotiated the terms of a settlement for at least several months (see 1410230056). Commerce last acted in late October to make an affirmative preliminary determination on dumping (see 1410310015).
American sugar importers criticized the agreement the day before it became public. “This managed trade structure will limit the quantity of Mexican sugar that may be imported into the United States and establish reference (or floor) prices below which such sugar may not be sold,” said the Sweetener Users Association (here). “For this reason, the draft suspension agreements represent a significant step backwards in the trade in sugar between the United States and Mexico."