July 15, 2014 / 5:29 PM / in 3 years

US sugar users oppose efforts to broker Mexico trade deal

NEW YORK, July 15 (Reuters) - U.S. food manufacturers and sugar users have urged top U.S. government officials to reject pressure to negotiate a trade deal with Mexico to end a months-long dispute over allegations of cheap sweetener imports from across the border.

In a letter sent on Tuesday, groups representing candy makers, soda companies, and other food manufacturers said any move to restrict imports could incite retaliation from Mexico on other products, undermine free trade across the continent under the North American Free Trade Act, and threaten over $220 billion in U.S. exports to Mexico.

The letter, which was released to news media, is the latest sign of escalating tensions in the U.S. sugar industry after producers filed a complaint in March accusing Mexico of dumping sugar in the U.S. market.

It comes just weeks before the U.S. Commerce Department is expected to decide whether to impose countervailing duties on Mexican imports following an investigation of the allegations.

The issue has polarized the U.S. sugar industry. Producers favor restricting imports or implementing dumping duties, while end users oppose any change to NAFTA that allows Mexico to import sugar duty-free in the otherwise protected U.S. market.

In Tuesday’s letter, the Coalition for Sugar Reform, the American Beverage Association, the Grocery Manufacturers Association, the U.S. Chamber of Commerce and others cited “troubling rumors” that pressure is being applied on the government to hammer out a deal that would include trade barriers.

That would “jeopardize this robust trading relationship (with Mexico) by providing U.S. sugar producers with even more insulation from market forces,” the groups said.

In May, U.S. Agriculture Secretary Thomas Vilsack said he would encourage a negotiated agreement. Such a deal could set a ceiling on Mexican sugar imports, which are currently unrestricted.

The letter also said an agreement could threaten the completion of negotiations of the Trans-Pacific Partnership, the ambitious Pacific trade pact.

The letter was addressed to Vilsack, Commerce Secretary Penny Pritzker and U.S. Trade Representative Michael Froman.

For the letter, click on: bit.ly/1sYH3uE Reporting by Chris Prentice; Editing by Jonathan Oatis

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