Sugaronline Editorial - The final countdown By Meghan Sapp

Published: 06/02/2017, 2:08:00 PM

In the Mexican-US sugar trade spat, it all comes down to the last word.



In the Mexican-US sugar trade spat, it all comes down to the last word.

 


With Monday’s deadline to reach an agreement on sugar trade between the US and Mexico quickly approaching, it’s now a question of working through the weekend to get the deal done, allowing the deadline to expire and implement anti-dumping tariffs on Mexican sugar imports, or postponing the talks a little longer in order to come to a comprehensive agreement.

The worst that could happen at this point is if the US lobbed anti-dumping tariffs on Mexico. Doing so would set a bad tone going into negotiations on NAFTA this summer and would further rile the feathers of the sugar industry in Mexico so that the anti-dumping investigation on HFCS became the focal point.

There’s little doubt that HFCS is being dumped, so taking a proper look at it would be a political Pandora’s box that once opened no one would be able to close. And the likelihood of it ending well for anyone is very slim.

The good news is that the US Secretary of Commerce appears to be truly trying to work with his Mexican counterparts to come to an agreement and he, so far, hasn’t been nasty about the impending deadline on June 5. That leads some to believe that he may be lax on the date or be willing to settle on a new date all together, giving the two sides more time to find middle ground.

The Mexican economy minister said this week progress has been made, they’re closer to reaching an agreement but that agreement hasn’t yet been struck. The news is welcome for those hoping to find a long lasting agreement, but there are plenty behind the scenes who are itching for a fight. It wouldn’t be a fight, however, it would be a trade war that no one would win.

Yet the minister told the Mexican press Thursday that he had the support of cane farmers behind him in his negotiations only to wake up Friday morning to an open letter to the president and his cabinet from the canegrowers union saying that the farmers refuse to allow him to throw them under the bus.

Would an ideal situation be for Mexico to keep its sugar and the US to keep its HFCS and everyone go about their business? Perhaps. It would certainly make things cleaner without forcing, or facilitating, dumping or anticompetitive behaviour. It’s not a very free trade perspective but in this case could be a solution, although an unlikely solution.

Choosing the “stay at home” route would take some of the pressure off the upcoming NAFTA negotiations in one sense, but on the other hand, if the two sides can’t come to terms on a single commodity (in reality, two commodities) then how are they going to handle thousands of tariff lines? It’s time for some grown up negotiations in a world full of covefefe.

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