Home Daily Blitz U.S., Mexico Reach Sugar Pact Without Backing From U.S. Producers

U.S., Mexico Reach Sugar Pact Without Backing From U.S. Producers

Workers spray fertilizer in a sugar cane field in Zacatepec de Hidalgo, in Morelos state, Mexico, May 31, 2017. Picture taken May 31, 2017. REUTERS/Edgard Garrido

The following is an excerpt from David Lawder | June 6, 2017 | Reuters.com |

The U.S. and Mexican governments reached a new agreement to significantly shift their sugar trade mix, but U.S. sugar producers have failed to endorse the deal, leaving question marks over whether it could still sour broader trade relations.

U.S. Commerce Secretary Wilbur Ross said the "agreement in principle" with Mexican Economy Minister Ildefonso Guajardo calls for Mexico to reduce the share of refined sugar in its exports to the United States, while increasing the share of raw sugar.

He said Mexico met nearly every request by the U.S. sugar industry to fix problems with a 2014 sugar trade agreement.

"Unfortunately, despite all of these gains, the U.S. sugar industry has said it is unable to support the agreement in its present form," Ross said without elaborating on their objections.

He added that the agreement would go through a final drafting stage in which he hoped that the U.S. producers could come on board with it.

Asked how long this would take, Ross said, "It should be days, not weeks or months."

The deal cut by Ross and Guajardo leaves Mexico's overall access to the U.S. sugar market unchanged but refined sugar must fall to 30 percent of overall imports from Mexico from a previous limit 53 percent.

It also lifts the U.S. price paid for Mexican raw sugar to 23 cents per pound from 22.25 cents, while, the price for refined sugar will rise to 28 cents per pound from 26 cents. These prices exclude shipping and packaging costs, the Commerce Department said in a summary.

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