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MEXICO CITY, Aug. 17 -- A protracted dispute over sugar trade
between Mexico and the United States escalated today when the
Mexicans rejected a United States proposal and requested a special
arbitration hearing under a provision of the North American Free
Trade Agreement.
The American side, clearly angered about a breakdown in talks,
called the Mexican request inappropriate. The American Sugar
Alliance, a coalition of United States sugar producers, said it was
shocked and disappointed.
Mexican officials argue that Nafta allows them to export up to
575,000 tons a year of their excess sugar to the United States
beginning Oct. 1. The United States maintains that Nafta allows for
only 110,000 to 120,000 tons. Neither side seems prepared to back
down on its interpretation of the regulations governing sugar trade
under Nafta.
Gregory Frazier, a United States trade representative negotiator
for agriculture, expressed surprise at the Mexican action. "I
didn't think it would come to this," Mr. Frazier said. "I
thought we would keep the negotiations going."
Mexican officials rejected the latest United States proposal
after meeting with Mexican sugar industry representatives. "We
decided that the proposal on the table does not satisfy Mexico's
needs, and for that reason we have decided to take the issue to a
Nafta panel," said Mexico's deputy trade minister, Luis de la
Calle.
Producers north of the border say that submitting to Mexico's
demands and allowing more sugar into the United States market would
be a serious blow to their business. They argue that sugar prices
are already depressed and that the additional Mexican sugar will
only make things worse.
"A teaspoonful more of sugar in this country would decimate
the United States industry," said Charlie Melancon, president
of the American Sugar Cane League in Louisiana.
Mexican producers counter that one of the main reasons they have
so much excess sugar is that the United States is exporting
increasingly large volumes of corn syrup to Mexico -- a practice
that Mexico says is hurting the Mexican sugar industry. Indeed, many
of Mexico's largest sugar companies are near bankruptcy, partly as a
result of a deluge of corn-syrup imports over the last decade.
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