Washington:
The US socked Mexican sugar imports with steep anti-dumping duties Monday, but said a new agreement with Mexico City was in the works that would eliminate any such penalties on Mexican exporters.
Two months after levying 17 percent anti-subsidy duties on imported sugar from Mexico, the Department of Commerce announced additional duties of up to 47 percent for dumping sugar into the US market.
All told the duties pose a potentially huge blow to the $1.1 billion annual trade. But as it announced the newest penalties, the department said officials from the two countries had initialed a deal that, if finalized, would end probes into alleged trade violations by Mexican producers and remove the duties.
"The suspension agreements initialed today will, if finalized, suspend the investigations, allowing Mexican sugar to continue to enter the US market without antidumping or countervailing duties. The agreements create mechanisms to ensure that unfairly traded imports of Mexican sugar do not cause injury to US sugar producers."
To end the countervailing or anti-subsidy duties, the Mexican government agreed to quantitative export limits on sugar exports to the US, the department said. As for the dumping issue, Mexican producers and exporters agreed to accept a minimum price on sugar shipped to the United States.
The deal will go through a 30 day review for public comment, and so will not be signed and implemented before November 26.
The duties were decided in response to a petition by US sugar producers earlier this year who said underpriced Mexican sugar was unfairly undercutting their own product.
"The agreements should provide critical stability in a market that is important to both countries, while also ensuring that farmers and sugar refiners in the United States have an opportunity to compete on a level playing field," said Stefan Selig, US Under Secretary of Commerce for International Trade.