By Leslie Josephs
NEW YORK--The U.S. and Mexico have struck a deal to scrap
tariffs on imports of Mexican sugar, ending a trade dispute that
rattled candy-makers over higher costs for their key
ingredient.
The U.S. will suspend duties on Mexican sugar that were
implemented earlier this year, and establish minimum prices "to
guard against undercutting or suppression of U.S. prices," the U.S.
Commerce Department said in a statement late Friday.
The deal could help narrow the gap between sugar in the U.S. and
the global market, where the sweetener is cheaper.
But the agreement also includes measures to limit the amount of
sugar Mexico can send to the U.S., through export limits, drawing
criticism from one food-industry group.
Unlike other sugar-producing countries like Thailand and Brazil,
an unlimited amount of Mexican sugar had been able to enter the
U.S. duty free under the North American Free Trade Agreement.
"With the stroke of a pen, these agreements dismantle the
unrestricted free trade of sugar between the U.S. and Mexico since
2008 and undermine the core principles of the North American Free
Trade Agreement," said the Sweetener Users Association, which
represents sugar-using companies, in a statement. "While sugar is
but one commodity traded between our two countries, these
suspension agreements set a horrible precedent by undoing trade
flows that have been established over two decades after Nafta was
first negotiated."
In August, the government imposed preliminary tariffs on Mexican
sugar imports following complaints by U.S. sugar growers, who had
said that Mexican subsidies for its sugar industry allowed
producers to flood the U.S. market with inexpensive supply,
undermining American growers. Additional tariffs were announced in
October.
The U.S. is the world's fourth-largest sugar consumer and relies
on imports--most of which come from Mexico--for about 25% of its
supply.
Write to Leslie Josephs at leslie.josephs@wsj.com.