Cargill goes to court to collect $95 million from Mexico

  • Article by: MIKE HUGHLETT , Star Tribune
  • Updated: November 14, 2012 - 8:15 PM

Money stems from free-trade case Mexico lost after it erected barriers to corn syrup sales.

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Signage for Cargill Inc. is displayed at their booth at the Institute of Food Technologists Annual Meeting & Food Expo In Chicago, Illinois, U.S., on Monday, July 19, 2010. Photographer: Tim Boyle/Bloomberg

Photo: Tim Boyle, Bloomberg

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Cargill Inc. has taken the Mexican government to a federal court, arguing that Mexico has failed to pony up a $95 million award stemming from a free-trade dispute.

The Minnetonka-based agribusiness giant and the Mexican government have had a long-running dispute over trade barriers that Cargill claims have hurt its high-fructose corn syrup business.

In 2009, an international arbitration panel concluded that Mexico had breached provisions of the North American Free Trade Agreement in the corn syrup dispute. The arbitration panel awarded Cargill damages of $77.3 million plus costs of $2 million.

Mexico appealed the decision to a federal court in Canada, which had technical jurisdiction over the arbitration. Canadian courts let the award to Cargill stand, and Mexico's road through Canada's appellate system ended earlier this year.

Cargill filed suit Tuesday in U.S. District Court for southern New York, asking for enforcement of the award, which with interest now totals $94.6 million.

Cargill sued to preserve legal rights that would have expired, said Nicole Reichert, a company spokeswoman. Cargill expects Mexico to cooperate and pay, she said.

High-fructose corn syrup is a staple ingredient in soda pop, and Mexico is a huge soda market. Cargill began selling high-fructose corn syrup there in the 1990s.

But the Mexican government, concerned about its own sugar industry, eventually erected trade barriers that increased the price of corn syrup.

Mike Hughlett • 612-673-7003

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