Safeguarding the Canadian Industry from the Diversionary Effects of the U.S. Trade Action against Mexican Sugar
On April 18, 2014, the U.S. Department of Commerce (DOC) announced that it would initiate an investigation to determine if the Mexican government has subsidized Mexico’s sugar production and whether that sugar is being dumped into the U.S. market. The DOC’s action was in response to a petition filed by the American Sugar Coalition (ASC), which includes all U.S. producers of sugar beets and raw cane sugar as well as nearly 70 percent of refined cane sugar. Sugar within the scope of the investigation includes raw sugar and estandar sugar (semi-refined) as well as refined sugar.
The U.S. border has been open to duty-free imports of Mexican sugar since January 1, 2008. Since that time, annual imports of sugar from Mexico into the U.S. have increased to over 2 million tons or approximately 18 percent of the U.S. market.
The Canadian Sugar Institute (CSI) supports free and fair trade in sugar and the elimination of the wide-spread government intervention that causes distortions in world sugar markets. By virtue of domestic policies, there is currently a very large sugar surplus in Mexico. As one of the few developed countries that does not maintain trade restrictive sugar policies, Canada is an attractive target for this sugar.
The CSI is concerned about unfairly priced surplus Mexican sugar and the effect that the U.S. investigation could have on diverting exports of that sugar to Canada. The CSI will closely monitor the situation to determine whether it is necessary to take similar action to protect the Canadian industry from that sugar.