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STEAMBOAT SPRINGS, Colo., Aug 9 (Reuters) - U.S. sugar industry
officials said Wednesday talks between the U.S. and Mexico over
sweetener trade have shown little movement so far, and negotiations
may run into September before a deal is hammered out.
The chief negotiator for the U.S., Greg Frazier, and Mexican
Trade Undersecretary Luis de la Calle told delegates from the U.S.
sugar industry attending the 17th annual Sweetener Symposium on
Tuesday they were in the final stages of the talks, but gaps
remained between the two sides.
"There appears to be a lot of gamesmanship involved. The
U.S. officials have told us that there have been no proposals so far
that could be seen as substantial. I think it will not be until the
middle of September before we see some movement in these
talks," a sugar beet farmer said.
Several U.S. sugar industry officials said Mexico, which has
warned it will ask for the formation of a trade dispute panel under
the North American Free Trade Agreement (NAFTA) over the issue, has
moved its deadline several times.
"So far, they're like two ships passing each other in the
night," a U.S. sugar cane farmer said, adding he expects more
substantial talks to be held close to the Oct 1 date when Washington
normally announces its annual sugar import quota.
Some delegates were not entirely encouraged by the tenor of the
discussions after listening to the two officials.
"The question is will they have the will, both here and in
Mexico, to successfully end the talks," another sugar beet
farmer said. He said the careful hedging by the two officials when
asked to describe how close they were to a deal was "not an
encouraging sign."
Frazier, who spoke in a teleconference call from Washington, said
both sides must "find the wherewithal to bridge the gaps that
remain" between the two countries.
"I don't believe we have bridged the gap yet," added
Frazier.
Another U.S. sugar farmer said one got the impression both sides
were trying hard to clinch an agreement, but the two cannot seem to
find a way to reach a compromise arrangement to settle their
simmering dispute.
Mexico has argued it is entitled under NAFTA to ship an estimated
surplus of 600,000 tonnes of sugar starting in the seventh year of
the agreement, which is due to start on Oct 1.
The U.S. says a side-letter to NAFTA, which U.S. legislators say
was vital to secure Congressional approval of the deal, only
guarantees up to 250,000 tonnes of duty-free access for Mexican
sugar. Further U.S. calculations pegged the amount to around
110,000-120,000 tonnes.
The negotiations are complicated by the unresolved issue over
high fructose corn syrup (HFCS), for which Mexico slapped an
anti-dumping duty that sparked a trade dispute with its powerful
northern neighbor. Mexico has until Sept 22 to tell Washington how
it intends to comply with a ruling by the World Trade Organization (WTO),
which ruled that Mexico violated trade rules by imposing
anti-dumping duties on HFCS without first determining that there had
been injury to domestic producers.
Jeff Lang, legal counsel of the industry group American Sugar
Alliance, said the better approach would be if the two countries
take solid steps "to see what they can do to move to a common
market" on sweeteners which NAFTA mandates must be in place by
2008.
Frazier said even if an agreement is reached on the current
dispute, it may run into "a lot of skepticism" from
Americans who have seen Mexico dismiss the side letter which secured
NAFTA approval in the early 1990s.
Rep. Larry Combest (R-Texas), chairman of the House Agriculture
committee, said earlier in the conference the side-letter "has
been violated continuously" and that future support for trade
agreements depends on adherence to such side- letters.
Rep. Charles Stenholm (D-Texas), the ranking Democrat on the same
agriculture panel in the House, told delegates here on Tuesday
"it's not going to do anyone any good" if the side
agreement with Mexico is not honored.
The stakes are high for both sides.
Since NAFTA went into effect in the U.S. on Jan 1, 1994, Mexico
has become the second biggest U.S. trade partner behind only Canada.
According to de la Calle, U.S.-Mexican trade has expanded by 15
percent annually to reach $250 billion in 1999 while trade between
the U.S. and Japan has grown by only 3-4 percent per annum to reach
$190 billion last year.
"We have surpassed Japan in a very substantial way," he
said.
"I do hope we can find a way to come up with an agreement
prior to the start of the marketing year (on Oct 1)," said
Frazier, adding a bitter result of the talks may have a corrosive
impact on U.S.-Mexican ties.
"They're trying to put their best face on it, but they still
have a lot of hard bargaining to get through," a U.S. farmer
said.
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