U.S. and Mexico Reach Agreement on Sugar Dispute

June 5, 2017  |  No Comments  |  by Nicole àBeckett  |  Blog

U.S. and Mexico have reached an agreement in the dispute over sugar trade today, according to sources (Reuters). The agreement will prevent a trade war in which the U.S. would have imposed steep tariffs on Mexican sugar imports and Mexico would have responded with equal tariffs on U.S. high-fructose corn syrup.

Details of the agreement are not yet public, but sources indicate the deal was made to benefit both countries. According to the Juan Cortina Gallardo, the president of Mexico’s sugar chamber, the managing of the sugar agreement will set a precedent for how further negotiations will play out (The New York Times). Since NAFTA was first negotiated in the early 1990s, the sugar industry has been the most contentious issue in U.S.-Mexico trade relations.

The current agreement will modify a 2014 agreement in which quotas and a price floor on Mexican sugar acted as an alternative solution to antidumping and antisubsidy duties. U.S. sugar companies had argued that the agreement was not doing enough to counter “unfairly subsidized” Mexican sugar companies, who could sell sugar in the U.S. at a price domestic companies could not compete with.

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Commerce Secretary Ross Wants NAFTA Renegotiation by January

June 1, 2017  |  No Comments  |  by Nicole àBeckett  |  Blog

U.S. Secretary of Commerce Wilbur Ross indicated Wednesday that the best time period to complete the North American Free Trade Agreement’s negotiation is by early January. By setting this window, the Trump Administration hopes to have the renegotiation done before both Mexico’s general elections and the 2018 U.S. Congressional elections (Reuters).

According to Ross, Mexico’s elections will make the approval of NAFTA more complicated because it needs Mexican congressional approval. Mexican Economy Minister Ildefonso Guajardo also urged for a final deal by the end of this year (Bloomberg). In the U.S., presidential powers to negotiate trade deals that can accepted or rejected by Congress without amendments expires in July 2018, justifying the urgency of the Trump Administration

Ross also said Wednesday that the Commerce Department would impose anti-dumping and anti-subsidy duties on Mexican sugar and Canadian softwood lumber as part of the renegotiations if settlements over the disputes are not achieved. The Mexican government subsidies sugar companies and Canadian lumber producers utilize government-owned land to produce, making it difficult for U.S. competitors to compete in both industries. Ross hopes to resolve both of these issues before the official modernization of NAFTA.

NAFTA negotiations will formally begin around August 16, following a 90-day period of domestic consultations with U.S. lawmakers, industry, and the public.

Stay up to date with all trade news, including updates on NAFTA, by following Mercatura Global on Twitter. As an advocate of free trade, Mercatura Global can counsel your company on how best to enter international markets and increase your export revenue. To develop your market entry strategy and identify strategic partners, contact Mercatura Global today.

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