As reported by Bloomberg Law, the Court of International Trade has rejected CSC Sugar’s challenge to the 2020 amendments to the suspension agreements with Mexico.
Article copied and linked below.
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The following is an excerpt from the CIT’s decision in the antidumping side of the case:
Turning to the merits, CSC Sugar maintains that Commerce’s adoption of the 2020
AD Amendment is unsupported by substantial evidence because “Commerce has
provided no evidence to show why the 2020 Amendment’s change in polarity standards
are necessary in addition to the amendment’s bulk-shipment requirement.”
Plaintiff also argues that “the polarity standard adopted is contrary to law because
Commerce must explain the ‘connection between the facts found and the choice made.’”
Plaintiff’s argument that Commerce failed to provide a “reasoned explanation” for
a change in the polarity threshold is misplaced. Commerce explained, throughout the
negotiation of the 2020 AD Amendment, why the changes to the polarity thresholds for
Refined Sugar and Other Sugar coupled with the inclusion of the “bulk shipment”
provision for Other Sugar work in concert to “eliminate completely” the injurious effects
of Mexican sugar imported into the United States. Specifically, during the negotiation of the 2020 AD
Amendment, Commerce explained that modifying the polarity thresholds and including a
bulk-shipping provision would help to address two critical issues: (1) diminished supply of
raw sugar for United States cane sugar refiners; and (2) decline in United States price of
Refined Sugar caused by exports of Mexican sugar into the United States.
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U.S.-Mexico Sugar Deal Amendments Upheld By Trade Court
By Brian Flood | June 25, 2020 05:56PM ET | Bloomberg Law
*Changes to sugar purity, shipping rules upheld
*Ruling a loss for U.S. refiner CSC Sugar LLC
The Trump administration’s recent amendments to agreements regulating the importation of sugar from Mexico will survive, the U.S. Court of International Trade said Thursday.
Under a pair of 2014 “suspension agreements” between the U.S. and Mexico, the Commerce Department agreed to halt trade investigations into Mexican sugar that could have led to antidumping and countervailing duties. The Mexican industry in return agreed to set minimum prices on different categories of sugar in order to mitigate the negative effects these imports were purportedly having on competing U.S. producers.
Sugar refiner CSC Sugar LLC successfully challenged amendments to these agreements negotiated by the Trump administration in 2017. These amendments included a change in the definition of “refined sugar,” which moved from a minimum purity level of 99.5% to 99.2%, and a requirement that non-refined sugar be transported to the U.S. in bulk and freely flowing in the holds of ocean vessels.
CSC claimed these changes unfairly benefited U.S. refiners with older mills built to handle lower-purity raw sugar, like cane sugar. Refiners like CSC with newer mills would be stuck with higher processing costs, the company said.
The trade court in October struck down the 2017 amendments, saying that Commerce’s failure to maintain contemporaneous records of meetings it held with interested parties during the negotiations was unlawful, and prejudiced CSC.
The Trump administration reopened negotiations, and in January it announced a new set of amendments. Once again, it set the minimum purity level of refined sugar at 99.2% and imposed the bulk shipment requirement.
CSC Sugar challenged these 2020 amendments as well, but the Court of International Trade upheld them in a pair Thursday. Commerce reasonably explained how the amendments would help to address two critical issues—a diminished supply of raw sugar for U.S. cane sugar refiners, and a decline in the U.S. price of refined sugar caused by imports from Mexico.
The court also rejected CSC’s argument that the bulk shipment requirement rendered the purity modification superfluous.
Husch Blackwell LLP represents CSC Sugar. The American Sugar Coalition, American Sugar Cane League, American Sugarbeet Growers Association, American Sugar Refining, Inc., Florida Sugar Cane League, Rio Grande Valley Sugar Growers, Inc., Sugar Cane Growers Cooperative of Florida, and the United States Beet Sugar Association, which joined the case in opposition to CSC Sugar, are represented by Cassidy Levy Kent (USA) LLP. Cámara Nacional de Las Industrias Azucarera y Alcoholera is represented by G reenberg Traurig LLP. The government of Mexico is represented by Pillsbury Winthrop Shaw Pittman LLP.
The cases are CSC Sugar LLC v. United States, Ct. Int’l Trade, No. 1:20-cv-00017, 6/25/20 and CSC Sugar LLC v. United States, Ct. Int’l Trade, No. 1:20-cv-00016, 6/25/20.
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