U.S. sugar producers are pushing to lower sugar imports from Mexico, pointing to violations of trade agreements.
They have petitioned Commerce Secretary Gina Raimondo for a 44% cut in Mexico’s sugar export quota to the U.S., starting April 1 for the fiscal year ending in September.
Despite a drop in Mexico’s sugar production last season, exports to the U.S. continued.
The Department of Commerce (DOC) is set to investigate potential circumventions of trade regulations.
These rules aim to prevent Mexico from supplementing its domestic sugar needs with imports while exporting to the U.S.
This year’s situation mirrors the last, with projections indicating Mexico’s sugar production could be at its lowest since 2000.
Robert C. Cassidy Jr., representing the Coalition, noted that Mexico’s exports have surpassed its production surplus and urged the DOC to enforce export limits.
A reduction in Mexico’s sugar exports could force the U.S. to seek additional imports, depleting already limited global sugar reserves.
Last year, U.S. sugar prices hit a record high, with global prices increasing for the fifth consecutive year, the longest streak since 1989.
To protect domestic producers, the U.S. sugar industry supports these import restrictions.
They aim to shield U.S. beet and cane refineries from foreign competition and prevent market saturation.
Mexico, as the U.S.’s primary sugar supplier, is asked to limit its exports to under 500,000 short tons, down from nearly 900,000 tons, due to decreased production from dry weather conditions.
Need for quota adjustments
The Coalition’s efforts to adjust Mexico’s export quota are not new. They previously addressed the DOC, highlighting the need for quota adjustments.
The Mexican government has rebutted allegations of trade agreement violations.
Responses from the DOC, Mexico’s Economy and Agriculture Departments, or the National Chamber of Sugar and Alcohol Industries were not available.
The American Sugar Coalition comprises key industry groups, emphasizing the significance of trade rules in shaping global supply chains and prices.
This case highlights the necessity of balancing domestic interests with international trade dynamics.