NAFTA Exit Would Trigger 15 cent Mexican Sugar Tariff

Dan Industry News Release, Trade

Withdrawing from the North American Free Trade Agreement (NAFTA) would revert the U.S. tariff on sugar imports from Mexico to 15 cents per-pound, the level in place before NAFTA went into effect.
A trade adviser to Agriculture Secretary Sonny Perdue told a meeting of the sweetener industry this week that NAFTA eliminated the U.S. tariff on sugar, but Mexican sugar imports to the United States are currently restricted because the U.S. government found that Mexico was subsidizing and dumping sugar in the United States. The U.S. could have imposed duties, but instead reached suspension agreements with Mexico that protect the U.S. sugar industry from unfair trade.

If NAFTA is terminated, however, the tariff “would bounce back” to the allowed tariff under World Trade Organization rules, 15 cents per-pound, close to 100 percent of the sugar price, according to the Hagstrom Report.

Analysts say that Mexico, which exports 1.2 million tons of sugar to the United States per year, would lose the U.S. market because its sugar would be too high to be competitive.

From the National Association of Farm Broadcasting News Service.