U.S., Mexico reach sugar pact despite U.S. producer resistance

6/6/2017 Reuters

Workers sit next to bags containing sugar at the San Francisco Ameca sugar factory in the town of Ameca
REUTERS/Alejandro Acosta/Files

Mexico on Tuesday conceded to U.S. demands for changes in the terms of Mexican access to the lucrative U.S. sugar market, striking a deal with Washington that will likely lift prices of the sweetener to U.S. food processors and consumers.

Sugar producers in the United States refused to endorse the agreement in principle between the two governments after pushing for even more concessions from Mexico, raising the possibility that the deal could collapse.

The agreement in principle between U.S. Commerce Secretary Wilbur Ross and Mexican Economy Minister Ildefonso Guajardo aims to resolve a long-standing trade dispute between the two countries.

Without it, the United States could have reimposed steep import duties on its southern neigbour and risked the prospect of a retaliation from Mexico just as the two countries and Canada prepare to renegotiate the North American Free Trade Agreement this year.

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U.S., Mexico nearing deal on sugar trade: Mexican economy minister

6/6/2017 Reuters

Workers sit next to bags containing sugar at the San Francisco Ameca sugar factory in the town of Ameca
REUTERS/Alejandro Acosta/Files

The United States and Mexico are close to announcing a sugar trade deal that will avert steep U.S. duties on Mexican sugar imports and clear a major obstacle from renegotiation of the NAFTA trade agreement, Mexican Economy Minister Ildefonso Guajardo said on Tuesday.

The deal, which was still coming together on Tuesday morning, will reduce the share of refined sugar that Mexico can export to the United States but maintain Mexico’s overall access to the U.S. sugar market, Guajardo said on Mexican radio.

Guajardo told CNBC earlier on Tuesday that he and U.S. Commerce Secretary Wilbur Ross would “probably” be announcing an agreement at a news conference scheduled for 1:45 p.m. (1745 GMT) at the U.S. Chamber of Commerce in Washington.

An agreement would help avoid potential retaliation from Mexico on imports of U.S. high-fructose corn syrup, a trade battle that would heighten U.S.-Mexico tensions as both countries along with Canada prepare to begin renegotiating the 23-year-old North American Free Trade Agreement in August.

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Mexico to cut share of refined sugar sent to U.S., minister says

6/6/2017 Reuters

Cut_sugarcaneMexico will reduce the proportion of refined sugar it can export to the United States to 30 percent under a new agreement likely to be announced later today, Mexican Economy Minister Ildefonso Guajardo said on Mexican radio on Tuesday.

Currently, the proportion of refined sugar exports from total sugar exports Mexico can send to the United States is 53 percent.

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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

coca-cola-bottles

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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