Cargill Inc. and the Mexican government have settled a long-running free-trade dispute over the corn syrup business.
In December, Minnetonka-based Cargill took Mexico to court, claiming the government had failed to pay a $95 million arbitration award stemming from the dispute. Cargill sued in U.S. District Court for southern New York to enforce the award.
Cargill confirmed Friday that the matter had been settled. The company has long claimed that Mexican trade barriers have hurt its high-fructose corn syrup business.
In 2009, an international arbitration panel concluded that Mexico had breached the North American Free Trade Act by erecting trade barriers, thus increasing the price of corn syrup. The 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 legal jurisdiction over the arbitration case. Canadian courts, though, let the Cargill award stand, ending Mexico’s appellate route in Canada.
When Cargill filed suit in New York, it claimed that it expected Mexico to pay but said it had to preserve its legal rights before they expired. By then, the award amount had grown to $94.6 million with interest.
“Cargill is pleased that this matter has been resolved,” the company said in a statement. “We are dedicated to compliance with NAFTA and believe NAFTA is a positive force for trade relations among the United States, Canada and Mexico. We will continue to invest in our Mexican business operations to better serve and support our customers in Mexico.”