| U.S. officials continue to consult with the domestic sugar
industry to prepare a response to Mexico's latest demands in a fierce
dispute over sweetener trade. Efforts to resolve a stalemate could be
delayed however, as national governments in both countries change this
winter, observers said. Mexico is said to still want access for up to
500,000 tonnes yearly, while the U.S. has granted its neighbor a
116,000-tonne quota for fiscal 2001.
"We're still talking with industry and other government agencies,
and haven't formulated a response for Mexico yet," said Todd Glass,
spokesman with the Office of the U.S. Trade Representative (USTR) in
Washington last week.
Mexico's latest demands have been kept confidential, but are similar to
past requests, industry members said. USTR negotiator Greg Frazier met
with Mexican counterparts in Washington three weeks ago.
Shifts in politics and production factors in Mexico and the U.S. have
complicated any negotiations, observers said.
"Any progress in discussions with Mexico could be delayed because
they've got a new government coming in six weeks and we'll be electing a
new government," said Dalton Yancey, executive vice president of the
Florida Sugar Cane League, who also represents growers in Hawaii and
Texas. "Officials are probably dusting off their resumes," in
both countries, and names of current negotiators could eventually change,
he said.
Mexican president-elect Vincente Fox takes office in December,
upsetting the party that's been in office for over 70 years.
Meanwhile, Mexico's sugar production and its exportable surplus have
grown rapidly since the North American Free Trade Agreement (NAFTA) was
signed in 1992 and side letter agreements were reached in 1993, observers
said. Mexico's sugar production swelled to record levels in the late
1990s.
U.S. sugar output has also been huge in recent years, and extra Mexican
sugar is unwanted here.
Much of the trade dispute between the U.S. and Mexico stems from NAFTA
side letters on sugar signed in 1993. The U.S. insists that at least one
side letter restricts Mexico's access to the U.S. to Mexico's net surplus
of up to 250,000 tonnes. The side letter displayed by the U.S. calculates
net surplus by subtracting high fructose corn syrup (HFCS) consumption,
lowering the final number.
Mexico claims the side letters are invalid and that sweetener trade
should be directed by the original NAFTA text. Under those terms, HFCS
would not be included in the net surplus arithmetic and Mexico could
potentially ship its entire surplus to the US. Mexico's sugar surplus, not
including HFCS, is running at 500,000 tonnes or more.
Industry observers in the U.S. say that in 1993, Mexico's Salinas
Administration may have been less than honest with its own officials and
local sugar industry about the importance of the NAFTA side letters
U.S. officials announced in mid September that Mexico's quota in fiscal
2001 is 116,000 tonnes, up from the 25,000 tonnes in 2000.
USDA's Jim Grueff, an assistant deputy administrator in the Foreign
Agriculture Service, said at an industry dinner in New York in early
October that Mexico's quota could be revised, depending on future talks
between the two sides. |