Imperial asks D.O.C. to end Mexican sugar deal

by Ron Sterk
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Imperial Sugar
The Imperial Sugar Co. says the agreement threatens thousands of U.S. jobs.

WASHINGTON – The Imperial Sugar Co. in a Dec. 5 letter requested U.S. secretary of commerce Penny Pritzker to immediately terminate the Countervailing Duty and Anti-Dumping Suspension Agreements between the United States and Mexico on the grounds the agreements violate fair trade laws and threaten the U.S. sugar industry unless issues can be resolved by a final negotiating deadline of Dec. 9.

“If these agreements are left in place, they will continue to endanger thousands of cane sugar refining jobs in cities that need these jobs the most — Savannah, Baltimore, New York, Detroit and the area around Oakland/Crockett, Calif. — while depressing sugar cane and beet farmer incomes across the United States for yet another year, if not longer,” said Michael Gorrell, president and chief executive officer of Imperial Sugar Co., a wholly owned subsidiary of Louis Dreyfus Co. L.L.C. “The current agreements will extend the extraordinarily bad effects of unfairly traded sugar on our market today by at least another year and will add another $1.2 billion of injury to our steadily weakening industry.”

Imperial said it has provided the U.S. Department of Commerce with “overwhelming evidence” of the injury to the U.S. sugar industry caused by the agreements since the D.O.C. began a formal review process in December 2015.

On Dec. 19, 2014, the U.S. and Mexico signed agreements suspending large duties on sugar imported from Mexico that resulted from findings by the D.O.C. and the U.S. International Trade Commission that the U.S. sugar industry was harmed by Mexico’s dumping of subsidized sugar on the U.S. market. The agreements allowed the import of unfairly traded Mexican sugar to continue under a rarely used section of the law that requires such agreements eliminate completely the injurious effect of imports.

“Yet U.S. Department of Agriculture data demonstrate that since the current agreements were implemented, the supply of Mexican sugar to the U.S. cane sugar refiners has been cut in half while the amount of unfairly traded refined sugar shipped directly to end users and distributors has increased,” Imperial said.

The Dec. 5 letter followed one from Imperial on Nov. 7, which also requested termination of the agreements, and one from the American Sugar Coalition on Oct. 28 requesting the D.O.C. issue a preliminary determination to terminate the suspension agreements as part of the annual review of the suspended investigation. On Nov. 29 the D.O.C. issued preliminary findings from its review that indicated some transactions conducted under the suspension agreements may be out of compliance, but said it was seeking additional information, which would be followed by post-preliminary results, a comment period and a final ruling in 120 days.

“The Department’s notices issued Nov. 29th suggest that the U.S. sugar industry may have to endure another five months of administrative processes and hearings while waiting for the Department to conclude what is obvious to all of us — that the current Suspension Agreements violate our nation’s laws governing fair trade, are no longer in the public interest and must be terminated,” Imperial said in its Dec. 5 letter to the D.O.C.

“The basic principal of whether Mexico ships raw sugar to cane sugar refiners or finished product to our customers is critical to the success of any agreement that the U.S. government negotiates to suspend duties under this investigation,” Imperial said. “Without this raw sugar supply, U.S. cane sugar refiners may be forced to close down.” 
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