In a ruling earlier this month, a Court of International Trade judge ordered that the 2017 amendments to the U.S.-Mexico Suspension Agreements be vacated.

Based on findings of dumping of and unfair subsidies for Mexican exports of sugar in 2014, U.S. authorities set antidumping duties (AD) and countervailing duties (CVD). These were suspended by the 2014 Suspension Agreements, establishing a quota mechanism and price floors for U.S. imports of Mexican sugar. Without these Agreements, the AD and CVD would theoretically once again be in effect.

The Agreements were amended in June 2017. Under these amended Suspension Agreements, the polarity of raw sugar from Mexico was lowered from 99.5 to 99.2 pol, with the further proviso that that sugar be shipped free flowing via bulk vessel.

In addition, previously established floor prices were raised for both raw and refined sugar. Initially, raw and refined prices were set at 22.25 and 26 cents per pound (FOB mill), respectively, but these were raised to 23 cents for raw and 28 cents for refined.

Finally, the ratio of raw to refined imports was set at 70 percent raw and 30 percent refined from an earlier ratio of 47 percent raw and 53 percent refined. Other changes were made in the calendar of the quota mechanism.

Citing procedural irregularities on the part of the U.S. government, a judge ordered that the amendments be vacated this October. There is at this point no certainty about how the matter will proceed or how any parties will respond to the judge’s order. With the threat of countervailing and antidumping duties in place, the Mexican sugar industry would presumably be eager to cooperate to ensure that some form of the Agreements remains in place.

Posted by: Information Services
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