Exclusive: U.S.-Mexico sugar deal struck ahead of NAFTA talks; industry divided

6/5/2017 Reuters

mexico-usa-flag-montageThe U.S. and Mexican governments reached a deal in a dispute over trade in sugar on Monday, sources said, averting steep U.S. duties and Mexican retaliation by Mexico on imports of American high-fructose corn syrup ahead of the renegotiation of NAFTA.

Two sources, speaking on condition of anonymity, said the two sides were working on final details of a deal in Washington that would end a year of wrangling. The latest talks began in March, two months after President Donald Trump took power vowing a tougher line on trade to protect U.S. industry and jobs.

They are seen as a precursor as well as significant hurdle to the more complex discussions on the North American Free Trade Agreement between the United States, Mexico and Canada, which are expected to start in August.

One source said the sugar deal would benefit both the United States and Mexico, with another saying Mexico will agree to export less refined sugar and send a lower quality of crude sugar to the United States than it previously did.

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Coke, Cargill enter fray as sugar dispute threatens Mexico trade

6/4/2017 Reuters

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Soda giant Coca-Cola Co and major corn syrup makers have joined the political battle against the U.S. sugar industry in recent weeks, as the deadline to hammer out a years-long trade dispute with Mexico nears.

Representatives from Coca-Cola (KO.N), corn syrup makers Archer Daniels Midland Co (ADM.N) and Cargill Inc [CARG.UL], and others met on May 10 with White House official Ray Starling, special assistant to the president for agriculture, trade and food assistance, said a number of people who attended the meeting and some of the companies involved.

They warned against potential fall-out for their industries if the United States and Mexico cannot agree to a new trade pact and avert large duties on U.S. sugar imports from Mexico. The deadline for an agreement is Monday.

For sugar buyers like Coca-Cola, a failure to come to a new agreement could disrupt supplies and drive up prices. The United States does not produce enough sugar for all its needs and relies on imports to fill the shortfall. For U.S. corn syrup makers, the escalating tensions put them under threat of a trade war with their largest foreign market.

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Anger in Mexican sugar cane fields, harbinger of NAFTA risks

6/4/2017 Reuters

Cut_sugarcaneAnger is simmering across a lush swathe of Mexico among poor sugar cane farmers who face a major blow from trade talks in Washington on Monday, in an ominous preview of the high-stakes re-negotiation of the NAFTA agreement set to begin in August.

The United States and Mexico have until Monday to modify a 2014 agreement that set quotas and a price floor on Mexican sugar. U.S. sugar refiners say Mexico’s exports are subsidized, undercutting their business and that the agreement failed to stop dumping.

A new deal could significantly reduce access to the lucrative U.S. market for some 190,000 Mexican farmers, a fifth of whose sugar last year was sold to U.S. buyers, and risks triggering tit-for-tat tariffs that could hurt U.S. corn.

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Defying fears over Trump, Mexico first-quarter economic growth holds steady

5/22/2017 Reuters

4350685550_dbd28c7e50Increased farm output and services led Mexico’s economy to grow at the same clip in the first quarter as in the previous three-month period, shrugging off fears that Donald Trump’s presidency would quickly cause havoc to Mexican exports and investment.

The country’s gross domestic product grew at a rate of 0.7 percent, the same pace as in the fourth quarter, according to seasonally adjusted data from national statistics agency INEGI on Monday.

The election of Donald Trump last year raised the specter of recession in Mexico as he threatened to shred the North American Free Trade Agreement (NAFTA) and pursue policies that could hurt the Mexican economy. This sent the country’s peso into a tailspin and prompted some economists to lower growth forecasts.

Nonetheless, slow progress in starting NAFTA talks and an overall softening of rhetoric about U.S. companies that invest in Mexico have calmed nerves for now.

Compared with the first quarter of 2016, GDP expanded 2.8 percent.

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Complex World of Border Trade: Cattle Go North, Meat South

5/22/2017 New York Times

meat-packagingREYNOSA, Mexico — Waving arms and brandishing a long electric prod, the ranch hands and truck drivers herd about 400 leggy calves onto trucks as the sun crests on the outskirts of this border city. After spending their first eight months on the ranches of Gildardo Lopez Hinojosa, the calves are about to cross the border — bound for Texas and U.S. feed lots beyond.

On one of the three bridges connecting Reynosa with Texas, they might cross paths with the beef and chicken shipments that Lopez imports from the U.S. for his local chains of butcher shops and fried chicken restaurants. He gets the best price for his calves in the U.S. and it’s cheaper for him to import U.S. chicken than ship Mexican chicken from the country’s interior.

Lopez has been selling calves and buying beef across the border for about as long as the North American Free Trade Agreement has been in effect. President Donald Trump has said the agreement that is the basis for much of the $500 billion annual trade between the U.S. and Mexico needs to be renegotiated or scrapped entirely. To hear him tell it, NAFTA was “a catastrophic trade deal for the United States.”

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Mexico private sector eyes more NAFTA content in future products

5/19/2017 Reuters

2779393681_48d4b53032_bA modernization of the NAFTA trade deal should protect existing industrial supply chains in North America, but could seek to source more work for future products from the member states to help create jobs, a top Mexican negotiator in the process said.

The government of U.S. President Donald Trump on Thursday triggered the process to start renegotiating the North American Free Trade Agreement (NAFTA) between the United States, Canada and Mexico, which could usher in formal talks by mid-August.

Trump has threatened to jettison the 23-year-old accord if he cannot rework it in favor of the United States, arguing it has gutted U.S. manufacturing by outsourcing jobs to Mexico.

NAFTA’s supporters say the integration of lower-cost Mexico into production chains has safeguarded employment by enabling North America to compete better with Asian and European rivals.

Mexican business leaders say toughening rules that stipulate a certain amount of content must be sourced from North America to qualify for NAFTA certification could be one way of allaying U.S. fears, and pave the way for an agreement on the revamp.

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Mexico’s avocado army: how one city stood up to the drug cartels

5/18/2017 The Guardian

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Flickr/Hector E Balcazar

Javier is finally starting to feel safe. A gruff 46-year-old avocado grower with a laugh like an idling Harley Davidson, Javier still remembers the gruesome reports of cartel gunmen kidnapping and killing a neighbour’s daughter, torching a local avocado packaging facility and murdering a pregnant schoolteacher. But the memories are starting to fade.

Tancitaro, the world capital of avocado production, has finally achieved a semblance of stability. It has been over two years since the last pitched battles between vigilante fighters and cartel gunmen on the outskirts. Families whose orchards were seized by cartel gunmen are now running their farms again. “The government doesn’t rule here. But it’s under control. You can relax,” he says.

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