Vilsack: Sugar case could cause problems with Mexico | TSLN.com

Vilsack: Sugar case could cause problems with Mexico

Agriculture Secretary Tom Vilsack said he fears the legal case U.S. sugar producers have filed asking for corrective action could affect other negotiations with Mexico, but a spokesman for the sugar growers said the case is justified.

In response to a question from Rep. Richard Nolan, D-Minn., at a House Agriculture Committee hearing, Vilsack said he "would have preferred this did not occur at this time."

Speaking to reporters after the hearing, Vilsack noted that the United States has been negotiating with Mexico on a range of agricultural issues and that Mexico has recently agreed to accept U.S. potato imports throughout the country. The country-of-origin labeling of red meat case, known as COOL, also is pending, he noted.

He also pointed out that Mexico is importing large quantities of high fructose corn syrup and said the Mexicans might ask why they are importing so much when a sugar case is launched against the country.

Vilsack said Mexico had taken 700,000 tons of sugar off the market, an apparent reference to Mexico's decision last year to export sugar to countries other than the United States.

Vilsack said he has a "good positive relationship" with Mexican officials and that he does not want to "jeopardize it." The secretary said Mexican officials have not expressed their views on the sugar case to him personally, but "have communicated to the United States their unhappiness."

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Philip Hayes, a spokesman for the American Sugar Alliance, said that while U.S. cane and beet producers are "very thankful" for the work Vilsack has done to stabilize the market, the action the Mexican government took "was temporary and too little, too late" and that the case is designed to force the government to enforce U.S. law against subsidized imports.

"Mexico increased its dumped and subsidized exports to the United States by 1 million tons from 2012 to 2013, crashing U.S. market prices, forcing USDA to remove 1 million tons of sugar from the U.S. market, and injuring U.S. farmers, sugar producers and taxpayers," Hayes said.

"Now it appears to be accelerating shipments into the United States this year far faster than USDA predicted. So far, Mexico has sent nearly 900,000 tons of the 1.7 million tons the USDA has predicted for the entire year. At this rate, the U.S. market could be looking at over 2 million tons total this year."

"U.S. trade law is designed to stop this injury and we are simply asking the U.S. government for the remedies provided by U.S. law," Hayes said. "We are confident that U.S. government officials will enforce US law objectively and vigorously."

On March 28, U.S. sugar producers filed antidumping and countervailing duty petitions with the International Trade Commission and Commerce Department, alleging that the Mexican industry had shipped sugar to the United States at prices 45 percent below the cost of production or more and has received substantial subsidies from Mexican federal and state governments.

Under the North American Free Trade Agreement, Mexico has the right to ship unlimited amounts of sugar to the United States, but other trade laws still make the shipment of subsidized sugar illegal.

Vilsack did not address the question of whether the sugar growers' charges are accurate.

–The Hagstrom Report

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