The U.S. Commerce Department on Tuesday determined that imports of Mexican sugar are subsidized.
Countervailable subsidies are financial assistance from governments that benefit the production of goods from overseas companies and are limited to specific enterprises or industries, or are contingent either upon export performance or the use of domestic goods over imported goods.
Commerce calculated a preliminary subsidy rate of 17.01 percent for Fondo de Empresas Expropiadas del Sector Azucarero (FEESA) and 2.99 percent for mandatory respondent Ingenio Tala S.A. de C.V. and certain other cross-owned companies of Grupo Azucarero Mexico S.A. de C.V. (collectively, the GAM Group). All other producers/exporters in Mexico have been assigned a preliminary subsidy rate of 14.87 percent.
As a result of its preliminary affirmative determination, Commerce will instruct Customs and Border Protection to require cash deposits based on these preliminary rates.
The petitioners for this investigation are the American Sugar Coalition and its individual members. The product covered by this investigation is sugar derived from sugar cane or sugar beets.
In 2013, imports of sugar from Mexico were valued at an estimated $1.1 billion.
Meanwhile, Commerce will announce its final determination in this investigation by Jan. 7, unless the statutory deadline is extended.
If Commerce makes an affirmative final determination, and the U.S. International Trade Commission makes an affirmative final determination that imports of sugar from Mexico harm domestic industry, Commerce will issue a countervailing duty order. If either Commerce’s or the ITC’s final determination is negative, no order will be issued. ITC is scheduled to make its final injury determination about 45 days after Commerce issues its final determination, if affirmative.
The Sweetener Users Association said the “ruling that the Mexican sugar industry received support from the Mexican government should surprise no one. The only surprise in this case has been that the U.S. sugar industry — which is among the most protected and supported industries in all of agriculture — would complain about support received by Mexican growers. This case has been, and continues to be, a cynical effort to drive up prices for consumers and kill American jobs in the food manufacturing sector.”