Mexico complies with suspension agreement on sugar with the US

Mexico has complied with the suspension agreement on sugar that it agreed with the United States, determined the Department of Commerce (DOC).

The agreements generally suspended antidumping and countervailing duty investigations of sugar imports from Mexico and are reviewed and renewed as determined by the US Department of Commerce every five years.

On January 4, 2022, the DOC preliminarily concluded, based on a sample of companies, that Mexico is in compliance with the CVD Suspension Agreement, except in minor instances, according to information from the Department of Agriculture (USDA).

Administrative review of CVD’s suspension agreement covering calendar year 2020 was requested on December 17, 2020 by the American Sugar Coalition, which represents the domestic US sugar producers that filed the antidumping and countervailing duty case.

On November 23, 2021, at the request of the USDA, the Department of Commerce raised Mexico’s Export Limit by 150,000 tons for “Other Sugar”, with a polarity of less than 99.2 degrees.

Suspension agreement

As the USDA had requested, this additional sugar was required to be exported to the United States no later than March 31, 2022.

Since the September 2021 export limit is 70% of the United States’ 2021 needs, the DOC established a revised “November Export Limit” of 908,730 tons (758,730 + 150,000).

The suspension agreement provides that once an Export Limit is announced, no subsequent Export Limit may be lower.

After the November 23 announcement, some in the US sugar industry noted that after December’s World Agricultural Demand and Supply Estimate (WASDE), the DOC would recalculate Mexico’s export limit to 80% of new US needs, and this number could be lower than November.

There were different interpretations in the industry regarding which methodology should be applied.

On December 8, citing the novelty of these scenarios in terms of calculation methodology and the lack of explicit language in the guidance agreements, Commerce requested comments from interested parties for consideration by December 14, five days after of the WASDE publication on December 9.

Thus, on December 21, after reviewing public comments, the DOC announced that the November export limit of 908,730 STRVs would remain as Mexico’s export limit, rather than the amount that would have resulted from a recalculation based on the December WASDE (841,520 STRV).

This decision essentially upheld the principle of not setting any Export Limit at a lower level than the previous Export Limit.

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