A U.S. refiner is appealing changes to U.S.-Mexico sugar trade deals, arguing the Trump administration merely “copied and pasted” earlier changes that had been struck down as unlawful, and wasn’t acting in the public interest.
Under a pair of 2014 “suspension agreements” between the U.S. government and Mexican industry, the Commerce Department agreed to halt trade investigations that could have led to antidumping and countervailing duties on Mexican sugar. The Mexican industry in return agreed to set minimum prices on different categories of sugar, like refined sugar, in order to protect U.S. industry.
The Trump administration negotiated changes to these deals in 2017. Among other changes, the minimum purity level of refined sugar was lowered from 99.5% to 99.2%, and a requirement was added that non-refined sugar must be transported to the U.S. in bulk and freely flowing in the holds of ocean vessels.
U.S. refiner CSC Sugar LLC challenged these changes, which it said 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 claimed.
The U.S. Court of International Trade struck down the 2017 amendments. Commerce’s failure to maintain contemporaneous records of meetings it held with interested parties during the negotiations was unlawful and prejudiced CSC, the court said.
The Trump administration reopened negotiations, and in 2020 it announced a similar set of amendments.
CSC Sugar challenged these 2020 amendments as well, but the Court of International Trade upheld them in June. Commerce adequately explained how the amendments would help to address 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 said.
CSC appealed those rulings to the U.S. Court of Appeals for the Federal Circuit.
Commerce’s lack of reasoned decision-making in the 2020 amendments is apparent, the refiner said. The department merely copied and pasted “entire paragraphs and entire pages” from its earlier memoranda in support of the 2017 amendments, which were “the product of an administrative process that the Trade Court held prejudicial and unlawful,” CSC argued in its opening brief filed Wednesday.
The department also failed to adequately consider the public interest, specifically how the changes “inure to the detriment of disruptor CSC Sugar and to the benefit of legacy refiners, further entrenching already oligopolistic interests,” CSC said, among other arguments.
Husch Blackwell LLP represents CSC.
The case is CSC Sugar LLC v. United States, Fed. Cir., No. 20-02227, opening brief filed 11/18/20.