Suspension Agreements

Suspension Agreements

The sugar provisions of the North American Free Trade Agreement (NAFTA) — which has been renegotiated and is now known as the United States-Mexico-Canada Agreement (USMCA) — give Mexico access to the U.S. market — the same treatment as virtually all other products, though political pressures delayed full market access for more than a decade after NAFTA went into force.

In 2014, U.S. sugar processors filed anti-dumping and countervailing duty complaints against Mexico. The resulting high duties would have severely disrupted trade with Mexico, but instead, the U.S. and Mexican governments negotiated agreements to enforce minimum prices and maximum sales of sugar from Mexico, effectively creating a managed trade regime that has forced U.S. sugar prices higher than the levels mandated by Congress.

These “suspension agreements” — signed in December 2014 and then amended in June 2017 – created an unnecessarily high floor price for both raw and refined sugar imports from Mexico, as well as burdensome volume restraints on sugar imports.

As a result, U.S. sugar prices have been artificially forced up — and certain U.S. cane refiners and their workers have been injured — by a deliberate, government-created shortage. And Mexican companies have benefited from higher prices established by the suspension agreements.

Congress should recognize the negative impact that the suspension agreements have had on the American economy. Congress should fix the U.S. sugar program to ensure American food manufacturers can access adequate supplies of sugar at a reasonable price so they can sustain and create jobs and produce quality products at affordable prices.