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WASHINGTON (Dow Jones)--U.S. and Mexican officials are spending
Tuesday consulting with their domestic sugar industries over
proposals exchanged during Monday's negotiations on sweetener trade,
sources told Dow Jones Newswires Tuesday.
The content of the proposals are being kept under wraps.
"What we can say is we know negotiations are going on. But
we want to maintain the integrity of the whole process (by not
revealing the contents of the proposals)," said Joseph Terrell,
spokesman for the American Sugar Alliance, a major U.S. sugar trade
group representing processors and refiners.
"We are hopeful that this can be resolved," he said.
Brendan Daly, spokesman for the U.S. Trade Representatives'
office, said the Mexican delegation has indicated consultations with
domestic sugar interests would continue throughout the day Tuesday
over those proposals. He said it is possible talks between the two
countries would continue later this week.
A press minister at the Mexico Embassy in Washington, D.C.
confirmed de la Calle was in meetings with Mexican industry
officials, but had no immediate details as to the content of the
proposals.
Chief U.S. agricultural trade negotiator Greg Frazier and Mexican
deputy commerce minister Luis de la Calle met for 2 1/2 hours Monday
to try to resolve disputes over sweetener trade between the two
countries.
The dispute began in 1997 when Mexico accused the U.S. of dumping
high-fructose corn syrup on its market and imposed stiff
anti-dumping duties on those imports. HFCS is used in soft drinks
and bakery products as a sweetener.
The U.S. balked at those duties and has since refused to increase
Mexican access to the U.S. sugar import quota.
Now Mexico has challenged a so-called "side letter
agreement" under the North American Free Trade Agreement that
the U.S. says limits Mexico's access to its sugar import quota. This
fiscal year, which ends Sept. 30, Mexico is allowed to ship 25,000
tons to the U.S. duty-free.
According to U.S. officials, the NAFTA side letter would allow
Mexico a quota allotment up to 250,000 metric tons in fiscal 2001.
But Mexico says it never signed this version. .
Mexico wants the original version of the side letter implemented.
This version would allow the country to export to the U.S. its
entire surplus production of around 600,000 tons in fiscal 2001.
The U.S. fears a flood of Mexican sugar into the country would
further exacerbate the glut of sugar in the U.S., which has
depressed prices.
The U.S. announced last year it would allow 1.362 million metric
tons of sugar, or 1.501 million short tons, to be imported under low
or no duties for the 2000 fiscal year, which began Oct. 1.
New quota allocations will be announced in September and
implemented Oct. 1.
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