Mexico challenges Imperial claims on sugar

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Sugar in a spoon
Says suspension agreements working in letter to D.O.C.

WASHINGTON — The Mexican Chamber of Sugar Producers in a Dec. 8 letter to U.S. secretary of commerce Penny Pritzker challenged several claims in a Dec. 5 letter from the Imperial Sugar Co. to the U.S. Department of Commerce concerning the Countervailing Duty and Anti-Dumping Suspension Agreements between the United States and Mexico. In effect, the Chamber said the agreements were working properly, asked the D.O.C. to disregard Imperial’s request for a final negotiating deadline of Dec. 9 and claimed “Imperial’s letter is replete with mischaracterizations and misinformation.”

The letter, signed by Irwin P. Altschuler, an attorney with theWashington law firm Greenberg Traurig, LLP, which represents the Sugar Chamber, noted key aspects of the Suspension Agreements and the events leading up to their signing by the United States and Mexico on Dec. 19, 2014, as well as several related subsequent issues. The letter noted that a reduction of sugar exports from Mexico to the United States was achieved as intended by the Suspension Agreements, and that by calibrating the export quota to U.S. needs, “the Agreements ensure that there can be no oversupply or shortage of Mexican sugar in the U.S. market.”

“Although Mexico believes that the current Suspension Agreements are working well, upon request by the Department (D.O.C.), the Mexican sugar industry and the Government of Mexico are currently negotiating in good faith to revise the Agreements,” the letter stated. “In the context of these negotiations, Imperial and other cane refiners seem to be intent on regaining the commercial advantages that were lost by using the Agreements as a mechanism to prevent U.S. companies with newer and non-traditional refining technologies — in particular ‘melt houses’ — from having access to raw sugar, because they view the melt houses as competitors. However, U.S. laws do not allow favoring one U.S. producer over another through a suspension agreement.

“In any case, we are optimistic that the current negotiations will result in revised Suspension Agreements that will restore stability in the North American sweeteners market. As such, we ask that the negotiations be allowed to continue without an artificial and arbitrary deadlines requested by Imperial.

“A cane refiner like Imperial that uses imported Mexican sugar in its production, in fact, benefited from the very conditions that injured the rest of the U.S. sugar industry by having a surplus of low-priced sugar from Mexico. Unfortunately for Imperial, the trade remedy laws and the Suspension Agreements eliminated this commercial advantage by limiting supply and raising prices.

“Imperial’s assertion that Mexico will be able to ‘bury the U.S. market with another flood of refined sugar’ is patently false. Under the Agreements, Mexico can only export the volume of sugar that is allowed by the Department as meeting U.S. needs.”

The U.S. D.O.C. currently is reviewing the Suspension Agreements as well as negotiating possible revisions sought by the United States that will adjust the amount of raw sugar and refined sugar that can be imported from Mexico.