NAFTA

NAFTA

The North American Free Trade Agreement (NAFTA) is important to U.S. manufacturers that depend on sugar for their products and the Americans these companies employ.

NAFTA established free trade in sugar between the United States and Mexico beginning on January 1, 2008. Today, Mexico is a critical supplier of sugar to the United States, as is Canada.

Unfortunately, the U.S. Department of Commerce took actions that essentially modified the free trade in sugar with Mexico in December 2014 and again in the summer of 2017, in ways that limit needed sugar imports from Mexico. These modifications – also known as the U.S.-Mexico suspension agreements – help contribute to the estimated $3 billion American consumers pay annually to guarantee high profits for big sugar processors, which harm U.S. consumers and put American jobs in jeopardy.

SUA Priorities for NAFTA Renegotiation

With NAFTA now being renegotiated, the U.S. government should push to amend NAFTA to include the following provisions, which take into account the likelihood that the suspension agreements will persist for some time:

  1. Compensate for the injurious new suspension agreements with a separate and permanent tariff-rate quota (TRQ) that would be exempt from the volume limits in the suspension agreements. This TRQ should be in addition to the minimum TRQ for other World Trade Organization members in order to achieve the goal of adequate supplies at reasonable prices for America’s domestic market.
  2. Restore sugar re-export trade. Mexico should again permit U.S. sugar to enter duty-free under the U.S. Refined Sugar Re-Export Program and Mexico’s IMMEX program. This trade will benefit both nations.
  3. Provide additional access for Canada. The negotiations under the Trans-Pacific Partnership (TPP) demonstrated that additional amounts of sugar from Canada and other origins could easily be accommodated without damaging the U.S. sugar policy regime. At a minimum, the cumulative concessions U.S. negotiators made to Canada and other TPP countries should be provided to Canada under any new NAFTA agreement.