Mexico ‘optimistic’ of reaching deal with U.S. on sugar trade row

(Reuters) – Mexico is optimistic an agreement can be reached this week to settle a sugar trade dispute with the United States, the country’s top trade official said on Wednesday, only days before the window for negotiations closes.

“Without a doubt, Mexico is optimistic that we can finish the negotiations with the Americans because if there isn’t a negotiated solution it will … hurt all of us,” Mexican Economy Minister Ildefonso Guajardo said while in western Mexico for the opening of a factory.

Mexico was prepared to keep negotiating until Friday, he said, when the U.S. Department of Commerce is due to make a decision on anti-dumping duties. That day is seen as a deadline to reach a deal, and the decision is scheduled to be announced on Monday.

Commerce has already recommended anti-subsidy duties on Mexican sugar imports after U.S. sugar producers complained Mexico was flooding markets with cheap, subsidized sugar.

A suspension agreement would typically involve deferring import duties in exchange for a promise that Mexican producers limit sugar sales to an agreed amount and potentially agree not to sell goods below a certain price.

A Mexican source close to the talks said on Tuesday that Mexico was seeking a floor on sugar exports of at least 1 million tonnes per year.

Guajardo declined to speculate on the components of a settlement, like a minimum export level, but he did sketch out Mexico’s main goals.

He said a deal must guarantee “sufficient” access to the U.S. market, that any agreement on prices must not impede negotiations over volumes and a final agreement must reach a “good balance” on exports of both refined and non-refined sugar.

Any additional demand for sugar above an agreed quantity would have to be supplied in terms that “completely favor” Mexican producers, he said.

A senior Mexican official said Mexico’s win over the United States in a World Trade Organization dispute over meat labeling, which gives Mexico the right to retaliate against U.S. exports, should give the country some leverage in the sugar talks.

The official said it was possible to reach a deal by Friday but noted the two parties were not moving much from their positions.