U.S. cane refiners challenge U.S.-Mexico sugar pact
Category: Sugar
(Reuters) – Louis Dreyfus Commodities’ Imperial Sugar Co and AmCane Sugar LLC have challenged the U.S.-Mexico trade deal, warning that the pact potentially harms domestic sugar refiners and prolonging a long-running dispute between the two countries.
In a filing on Thursday, Imperial asked the U.S. International Trade Commission (ITC) to review suspension agreements hammered out last month aimed at ending a spat that has roiled trade between the two countries, cut off crucial raw sugar supplies from Mexico, and elevated tensions between those countries for almost a year.
Fellow refiner AmCane Sugar LLC has joined the review, according to the company’s lawyer, who confirmed that the group filed its own “official challenge.”
In March, the U.S. sugar industry accused Mexico of dumping cheap subsidized sugar in the heavily protected U.S. market.
The recent deal that set quotas and minimum sales prices rather than impose heavy antidumping and other penalties for Mexican imports into the United States, does not go far enough to prevent injury to the U.S. refiners, Imperial’s counsel said in the Jan. 8 document filed to the U.S. Department of Commerce.
“The stakes are high” for Imperial Sugar, other cane refiners, and their customers, the company letter said.
“If these agreements enter into force, domestic production of cane sugar and related jobs would be at risk.”
A spokeswoman for Louis Dreyfus could not immediately be reached for comment because of the late hour in Geneva.
The requests for review could prolong the sugar dispute that has roiled prices and trade flows between the two countries for nearly a year.
Imperial Sugar and other cane refiners worry that the so-called suspension agreements would curb imports of raw sugar to feed their plants.
At the same time, they face greater competition from bumper refined sugar output, which Mexican mills sell direct to food manufacturers and other sugar processors. Under NAFTA, Mexico has had unfettered access to the coveted U.S. sugar market in 2008.
“Not only do the suspension agreements not eliminate the injury, they actually augment that injury to cane refiners,” John Magnus, AmCane’s counsel, told Reuters in a phone interview.
ITC is reviewing the requests and determining next steps, as this is the first time the review statute has been invoked since being written into law in 1979, said an agency spokeswoman.
