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US-Mexico reach sugar pact without US producers
Sugarcane field

The photo shows a sugarcane field.

Both the United States and Mexico government had came to an agreement in principle on the trade in sugar however the US sugar producers have failed to support the deal, according to the US Commerce Secretary, Wilbur Ross on Tuesday.


Ross stated that under the agreement, Mexico in its export to the US would reduce the share of refined sugar while increasing the share of raw sugar exports. The agreement also lifts the minimum price for the imports from Mexico.


The agreement between Ross and Mexico’s Economy Minister, Ildefonso Guajardo aims to avoid steep duties on Mexican sugar as well as resolving the long standing trade dispute between the two countries. Both of them and Canada are preparing for a renegotiation of the North American Free Trade Agreement (NAFTA) in August this year.


According to Ross, Mexico had met almost every request made by the US sugar industry to fix the problems with the 2014 sugar trade agreement to ensure American sugar growers and refiners are treated fairly. However, he added, despite all, the US sugar industry has expressed their inability to support the current agreement.


The agreement would be going through the final stage of drafting whereby Ross expressed his hopes that the US producers would change their mind and join the agreement.


Mexico will have an unchanged overall access to the US sugar market after the agreement but the overall import of refined sugar will be decreased from 53 to 30% while the US price paid for Mexican raw sugar is increased from 22.25 cents to 23 cents per pound while refined sugar price is also increased from 26 cents to 28 cents per pound.


The price, according to the Commerce Department, excludes cost of shipping and packaging.


According to Reuters, on Monday sources on both side of the border stated that new demands outside of the terms agreed earlier by the two governments had been added by the US sugar industry.


The agreement signifies the climax of years of dispute between the two countries over sugar. In 2014, US groups asked for protection from subsidised exports from Mexico and the government had subjected Mexico to large duties on Mexican sugar. However, after a deal with Mexico, the levies were suspended.


Some in the US industry stated that the deal had failed to eliminate harm from Mexican imports to US producers.

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