U.S. sugar industry prevails in fight over restrictions on Mexican imports

WASHINGTON – The U.S. sugar industry, including Minnesota's nation-leading sugar beet producers, won a regulatory marathon Tuesday as the federal government gave final approval to import restrictions on Mexican sugar.

The restrictions come despite the fact that Mexico was supposed to have open access to the U.S. sugar market as part of the North American Free Trade Agreement (NAFTA).

The U.S. International Trade Commission voted unanimously that new import restrictions placed on Mexico were sufficient to address unfair Mexican government subsidies of private sugar producers and refiners that allowed them to sell at artificially low prices in the U.S. market.

The U.S. sugar industry's complaints about Mexican government subsidies and sugar dumping were seen by some as another example of the industry's clout. Although NAFTA passed in 1993, Mexico did not gain full access to the U.S. market until 2008 because of phase-in rules. Now, seven years later, the industry has successfully restricted Mexican imports.

Supporters of the U.S. sugar program, which guarantees prices for U.S. producers and refiners through import controls and price and loan guarantees, welcomed the news.

"Free trade does not give them the right to violate U.S. trade laws," David Berg, CEO of Moorhead-based American Crystal Sugar Co., told the Star Tribune. "The Mexican government was subsidizing sugar mills and sugar growers. We should not have to compete with the Mexican treasury."

The Sweetener Users Association, a coalition of candy makers, beverage companies and food producers who say the U.S. sugar program is both costly and unnecessary, called the trade commission vote a missed opportunity "to do the right thing for American consumers, taxpayers and businesses."

The Mexicans tentatively agreed to export less sugar to the U.S. in a deal struck in December 2014. But the process continued because two U.S. sugar businesses wanted regulators to take a longer look at the issue.

In any case, the battle over sugar subsidies in the U.S. and other countries shows few signs of abating. The sweetener users have managed to get bills killing the sugar program introduced in recent years. Tuesday they pledged to "redouble" efforts to get such legislation passed in the future.

Meanwhile, the U.S. sugar industry, led by Crystal Sugar, flexed its political muscles by pouring millions of dollars into campaign contributions and lobbying to keep the sugar program in a five-year federal farm bill passed in 2014.

Still, Berg maintained that Tuesday's vote was a matter of regulatory investigation, not political clout.

"I don't think what happened with Mexico is a demonstration of political power because this was not an act of Congress," he said. "This was adjudicated by the International Trade Commission and supported by in-depth legal research by the Department of Commerce. That's not political power. That's simply unearthing facts."