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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