U.S. Secretary of Agriculture Sonny Perdue today issued a statement regarding a new agreement between the United States and Mexico regarding the importation of Mexican sugar.
USA sugar producers claim the current agreement hasn’t stopped Mexico from undercutting the price of sugar.
“We are willing to consider any rebalancing, as long as it’s through trade expansion, not through trade restriction”, Guajardo said Tuesday in an interview with Bloomberg News in Washington, adding that his government opposes tariffs or quotas on Mexican goods or services.
Earlier this year, Commerce Secretary Wilbur Ross accused Mexico of taking advantage of NAFTA rules, saying, “Mexico’s trade deficit with China is approximately equal to their trade surplus to us”.
The Alliance said it intends to work with the Trump administration in an effort to close the loophole.
Without it, the United States could have reimposed steep import duties on its southern neigbour and risked the prospect of a retaliation from Mexico just as the two countries and Canada prepare to renegotiate the North American Free Trade Agreement this year.
Guajardo expects the countries to make an announcement regarding an agreement at this afternoon’s conference.
There is a difference in terms of the split between raw sugar and refined sugar. “Since we don’t use any type of currency manipulation schemes – we have a floating exchange market – we are very glad to consider any type of process that would stabilize the Mexican peso”.
Ross had threatened to end the three-year truce and reinstate anti-dumping and countervailing duties if no deal could be reached by Monday.
Another Mexican official with knowledge of the negotiations told Reuters that the proposed deal also lowered the allowed polarity, a measure of quality, for Mexican sugar exports.
US refiners wanted even more stringent terms on imports from Mexico.
The price of Mexican raw sugar will rise to 23 cents per pound, up from 22.25 cents, while refined sugar will increase to 28 cents a pound from 26 cents, which Ross said would protect USA sugar from dumping by Mexico. The U.S. pushed for and received a decrease to 99.2 percent purity from 99.5, which will likely restrict Mexican importers from selling their product directly to U.S. beverage companies and other businesses. Talks between the two nations on the issue ramped up this week with the USA industry coming up with some last minute demands.