ITC issues injury ruling in Mexican sugar case
May 09, 2014 | 02:17 PM
The United States International Trade Commission today determined that there is a “reasonable indication” U.S. sugar growers have been materially injured by imports of Mexican sugar that were subsidized and sold in the United States at less than fair value.
The vote was 5 to 0, with USITC Chairman Irving Williamson and Commissioners Dean Pinkert, David Johanson, Meredith Broadbent, and Scott Kieff voting in the affirmative, and Commissioner Rhonda Schmidtlein not participating in the investigation, the commission said in a news release.
As a result of the commission’s determinations, the Commerce Department will continue to investigate, with its preliminary countervailing duty determination due on or about June 23, and its antidumping duty determinations due on or about September 4.
The commission’s public report on sugar from Mexico will contain the commission’s views and information developed during the investigations, and will be available after June 9.
“The ITC made the right decision today and validated our complaints,” said Phillip Hayes, a spokesperson for the American Sugar Alliance. “Mexico’s actions have harmed hardworking sugar producers as well as taxpayers. U.S. trade laws are designed to stop such injury, and we hope corrective actions will be taken soon before the situation deteriorates.”
Hayes said losses would compound unless U.S. law is enforced and Mexico stops dumping and subsidizing its sugar exports.
U.S. sugar growers claimed that Mexico’s actions will cost the industry $1 billion this year. Their petitions further noted that efforts by U.S. government officials to keep the market from collapsing under the surge of subsidized Mexican imports cost taxpayers $278 million in fiscal year 2013, when U.S. growers exercised their right to forfeit sugar to the Agriculture Department because prices fell below support levels.
The Congressional Budget Office has said low sugar prices could lead the government to spend $390 million between fiscal years 2015 and 2024.
Under the North American Free Trade Agreement, Mexico has the right to export unlimited amounts of sugar to the United States but not if that sugar is subsidized or dumped. About 20 percent of the Mexican sugar industry is government-owned.
The Sweetener Users Association, which represents candy companies and other industrial sugar users, said, “Given the low threshold for determining injury in the USITC’s preliminary determination, we are not surprised by today’s ruling. The vote simply allows the investigation to continue.”
“However, while U.S. sugar producers had the right to file the petition under U.S. law and the USITC has at this early stage made a preliminary determination of injury, it should not be assumed that the case has merit,” the group said. “To the contrary, we expect that the U.S. sugar producers will lose when the USITC is able to complete its full investigation.”
“This petition is a diversionary tactic to distract from the real cause of distortion in the U.S. sugar market — the U.S. government’s sugar program,” the users said.
“Changes made to the program in the 2008 farm bill are to blame, not Mexico. From 2009-2012, U.S. sugar prices soared well above the world price because of the sugar program, incentivizing growers in both Mexico and the United States to increase production. A surplus of sugar resulted, leading to a return to historical pricing levels that U.S. and Mexican sugar producers are experiencing in the United States today.”
The vote was 5 to 0, with USITC Chairman Irving Williamson and Commissioners Dean Pinkert, David Johanson, Meredith Broadbent, and Scott Kieff voting in the affirmative, and Commissioner Rhonda Schmidtlein not participating in the investigation, the commission said in a news release.
As a result of the commission’s determinations, the Commerce Department will continue to investigate, with its preliminary countervailing duty determination due on or about June 23, and its antidumping duty determinations due on or about September 4.
The commission’s public report on sugar from Mexico will contain the commission’s views and information developed during the investigations, and will be available after June 9.
“The ITC made the right decision today and validated our complaints,” said Phillip Hayes, a spokesperson for the American Sugar Alliance. “Mexico’s actions have harmed hardworking sugar producers as well as taxpayers. U.S. trade laws are designed to stop such injury, and we hope corrective actions will be taken soon before the situation deteriorates.”
Hayes said losses would compound unless U.S. law is enforced and Mexico stops dumping and subsidizing its sugar exports.
U.S. sugar growers claimed that Mexico’s actions will cost the industry $1 billion this year. Their petitions further noted that efforts by U.S. government officials to keep the market from collapsing under the surge of subsidized Mexican imports cost taxpayers $278 million in fiscal year 2013, when U.S. growers exercised their right to forfeit sugar to the Agriculture Department because prices fell below support levels.
The Congressional Budget Office has said low sugar prices could lead the government to spend $390 million between fiscal years 2015 and 2024.
Under the North American Free Trade Agreement, Mexico has the right to export unlimited amounts of sugar to the United States but not if that sugar is subsidized or dumped. About 20 percent of the Mexican sugar industry is government-owned.
The Sweetener Users Association, which represents candy companies and other industrial sugar users, said, “Given the low threshold for determining injury in the USITC’s preliminary determination, we are not surprised by today’s ruling. The vote simply allows the investigation to continue.”
“However, while U.S. sugar producers had the right to file the petition under U.S. law and the USITC has at this early stage made a preliminary determination of injury, it should not be assumed that the case has merit,” the group said. “To the contrary, we expect that the U.S. sugar producers will lose when the USITC is able to complete its full investigation.”
“This petition is a diversionary tactic to distract from the real cause of distortion in the U.S. sugar market — the U.S. government’s sugar program,” the users said.
“Changes made to the program in the 2008 farm bill are to blame, not Mexico. From 2009-2012, U.S. sugar prices soared well above the world price because of the sugar program, incentivizing growers in both Mexico and the United States to increase production. A surplus of sugar resulted, leading to a return to historical pricing levels that U.S. and Mexican sugar producers are experiencing in the United States today.”
