The United States will continue allowing Mexico to sell it sugar duty-free, the Mexican economy minister said Tuesday as the countries prepared to announce a deal on a long-running trade dispute. "Mexican sugar will retain its access to the US market, without paying compensatory tariffs," Economy Minister Ildefonso Guajardo told TV network Televisa.
In return, Mexico has agreed to reduce the amount of refined sugar it sends to the United States, he said. Last year Mexico exported 1.1 tonnes of sugar to the United States, some 40 percent of which was refined. US sugar producers have protested the amount of cheap sugar pouring across the border, accusing Mexico of subsidizing its sugar industry then dumping the excess product.
Washington had threatened to slap tariffs of up to 80 percent on Mexican sugar unless a deal was reached. The original deadline was Monday, but the two sides extended it to Tuesday to iron out what US Commerce Secretary Wilbur Ross called "a few technical details." Ross and Guajardo are expected to announce a deal in Washington later Tuesday.
"We are quite optimistic that our two nations are on the precipice of an agreement we can all support," Ross said Monday. The dispute comes as the two neighbors, along with Canada, are set to renegotiate the North American Free Trade Agreement (NAFTA). Mexican sugar has entered the US market tariff-free since 2008. In exchange, the Mexican market was opened to US corn-based fructose, used mainly to sweeten soft drinks. After protests from US sugar companies and farmers, both governments agreed to Mexican sugar export quotas in 2014. But complaints from US sugar concerns continued, and Washington and Mexico City reopened talks last year.