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MEXICO CITY, July 27 (Reuters) - U.S. talks with Mexico this week on
sweetener trade issues have ended without an agreement, though both
sides plan to meet again, according to trade officials in both
countries.
Greg Frazier, the special U.S. negotiator for agriculture, was in
Mexico this week for talks over how much duty-free access the Latin
American nation's sugar will have to the U.S. market. Frazier told reporters late on Wednesday in Mexico City after
meeting with Mexican Trade Undersecretary Luis de la Calle that talks
would continue on the touchy issue.
"We talked this afternoon and we will continue talking...we had a
good meeting but it's a very complicated negotiation," Frazier said.
The U.S. agriculture official is currently en route back to
Washington and the office of the U.S. Trade Representative may have
further comment later on Thursday or on Friday, a USTR spokesman told
Reuters on Thursday.
Mexico has argued it is entitled under the North American Free Trade
Agreement (NAFTA) to ship all of its surplus sugar to the United States
starting in the seventh year of the trade agreement, which begins Oct.
1.
The United States says a "side letter" to NAFTA only guarantees
Mexico up to 250,000 tonnes of duty-free access beginning in year
seven, with the exact amount dependent on Mexico's domestic consumption
of sugar and high-fructose corn syrup (HFCS), a sugar substitute.
Mexico has threatened to initiate NAFTA dispute settlement
proceedings if the issue is not resolved by July 31.
Mexico's sugar industry on Wednesday expressed frustration on the
standstill. "The industry wishes that the treaty was respected under its original
terms. We've waited seven years for access to the U.S. market and I
think that it is fair for us to have access for all of our surplus,"
said Mexico's National Sugar Chamber President Carlos Saone.
Mexico's sugar surplus this year is estimated at 600,000 to 700,000
tonnes. But under the U.S. formula, some analysts have calculated
Mexico's access in 2000/01 at about 110,000 tonnes. Mexico's industry also turned up the heat on the conflict, saying it
would call for the application of a trade "safeguard" to block U.S.
high fructose corn syrup shipments to Mexico if the impasse went to
arbitration, according to a report in Mexican newspaper Reforma on
Thursday.
Mexico's annual consumption of the corn syrup is about 550,000 tons,
of which 250,000 tons are imported, some of which comes from the United
States, according to Reforma.
Corn syrup has already become a volatile issue between the two
nations, with the United States pressing Mexico to remove anti-dumping
duties on U.S. high fructose corn syrup. Mexico has until Sept. 22 to tell the United States how it intends
to comply with a WTO ruling in the anti-dumping case. The WTO ruled that Mexico violated trade rules by imposing the
duties without first determining that there had been injury to domestic
producers.
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