U.S. Sugar Industry Focused On Litigating Trade Cases

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By Rossella Brevetti    

July 22 --The U.S. sugar industry is not pressing the U.S. or the Mexican government or industry to negotiate an agreement on sugar trade, but is busy litigating antidumping and countervailing duty cases filed against sugar imports from Mexico, a spokesman for the sugar industry told Bloomberg BNA in an e-mail July 21.

“It is up to the U.S. and Mexican governments to decide whether they want to discuss an equitable settlement of the cases and whether they want to take advantage of the settlement procedures established by the Congress under the antidumping and countervailing duty statutes,” the spokesman added.

In a July 15 letter, the Coalition for Sugar Reform, a broad-based group of business associations, told Agriculture Secretary Tom Vilsack, Commerce Secretary Penny Pritzker and U.S. Trade Representative Michael Froman that they had heard “troubling rumors” that the Obama administration was being pressured to consider negotiating a managed trade agreement with Mexico to resolve the antidumping and countervailing duty petitions filed against U.S. imports of sugar from Mexico. Officials at the Mexican Embassy in Washington D.C. did not respond to requests for comments.

“We oppose managed trade in principle, especially between the United States and one of its [North American Free Trade Agreement] partners. Such an agreement would be particularly inappropriate in the case of sugar, a U.S. industry that already receives tremendous government protection from market forces at the expense of U.S. consumers and U.S. taxpayers,” the groups wrote.

The Coalition for Sugar Reform letter was signed by 17 business groups and associations, including the U.S. Chamber of Commerce, American Bakers Association, Competitive Enterprise Institute, National Consumers League, American Beverage Association, American Frozen Food Institute, National Confectioners Association, National Foreign Trade Council and the Sweetener Users Association.

The letter warned that restricting sugar trade between the U.S. and Mexico would run counter to U.S. NAFTA obligations and the “shared objective of completing a comprehensive Trans- Pacific Partnership (TPP) agreement that expands upon existing trading relationships, including those of NAFTA partners.”

Letter Warns of TPP Consequences

“The job of U.S. negotiators who are demanding comprehensive access for U.S. exports to the markets of all TPP negotiating partners would be made all the more difficult if the United States were simultaneously rolling back some of the trade liberalization that was enacted in NAFTA, particularly with a product such as sugar,” the letter warned. An industry source told Bloomberg BNA July 22 that no response had been received so far from administration officials.

The Commerce Department is investigating allegations that Mexican producers are dumping sugar in the U.S. market and that the Mexican government is providing countervailable subsidies .

The petitions for these investigations were filed by the American Sugar Coalition and its individual members--the American Sugarbeet Growers Association; the American Sugar Cane League; American Sugar Refining, Inc.; the Florida Sugar Cane League; Hawaiian Commercial & Sugar Co.; Rio Grande Valley Sugar Growers Inc.; Sugar Cane Growers Cooperative of Florida; and U.S. Beet Sugar Association. The American Sugar Alliance, an organization with the same membership, backs the investigations.

Commerce's preliminary countervailing duty ruling is currently scheduled to be announced on Aug. 26 while the preliminary antidumping determination is expected on Sept. 5.

A Commerce Department official told Bloomberg BNA on background in an e-mail that Commerce has the statutory authority to negotiate suspension agreements with foreign governments/producers/exporters of products subject to antidumping and countervailing duty investigations. When Commerce receives a proposal to consider entering into a suspension agreement, Commerce evaluates the proposal pursuant to statutory and regulatory criteria, the official added. In addition, prior to any suspension of an AD/CVD investigation, Commerce gives interested parties a chance to comment on the proposed agreement, the official said. A Commerce spokesman said he could not comment on whether Commerce had received a request to consider such negotiations.

To contact the reporter on this story: Rossella Brevetti in Washington at rbrevetti@bna.com  

To contact the editor responsible for this story: Jerome Ashton at jashton@bna.com