Canadian Manufacturing

Mexico dumped subsidized sugar on U.S. markets, says commission

The U.S. International Trade Commission ruled that subsidies let Mexican companies sell sugar at less than 60 per cent of market value

NEW ORLEANS—Mexico hurt U.S. sugar farmers in this country by dumping heavily subsidized sugar on U.S. markets from 2011 into 2014, the U.S. International Trade Commission ruled Oct. 20.

The unanimous decision means agreements to avert hefty tariffs on Mexican sugar and to keep Mexican producers from undercutting U.S. prices will remain in effect into December 2019, the American Sugar Alliance said. Mexican producers accepted total export limits and minimum prices set by the United States.

The Sugar Alliance was among groups that asked the commission and the U.S. Commerce Department to investigate in March 2014, saying imports subsidized by the Mexican government had cut the price of raw sugar from more than 40 cents a pound to less than 20 cents since 2011.

“If other countries want to sell in the U.S. market, they need to play by the rules,” U.S. Rep. Charles W. Boustany Jr., R-Louisiana, said in a statement. “Today’s unanimous ITC decision confirms what we already know – Mexico’s sugar industry has been cheating on our agreements for some time, hurting sugar producers across South Louisiana.”

Commerce Department investigators found that subsidies let Mexican companies sell sugar in the United States at less than 60 per cent of fair market value.

The dumping affected both sugar beet and sugar cane farmers, sugar alliance spokesman Phillip Hayes said. Sugar beets are grown in 10 states from Michigan to California and sugar cane in four southern states.

The U.S. Department of Agriculture is estimating this year’s likely production at 8.8 million tons, including 5.1 million tons of beet sugar and 3.7 million of cane sugar. Total imports are forecast at 3.4 million tons, about 1.5 million from Mexico, according to the department’s Oct. 16 forecast.

Two years ago, it said, total U.S. production was estimated at 8.5 million tons, with Mexico providing 2.1 million of the estimated total 3.7 million tons imported.

Hayes said the ruling will help ensure that the North American Free Trade Agreement operates as it was meant to, “to foster fair and free trade in sugar between Mexico and the United States.”

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