Aus sugar industry takes on the US

24/11/2014 12:00 - 569 Views

SUGAR markets that stand on their own merit, like Australia's, will be disadvantaged by the United States Department of Commerce's proposal to subsidise Mexican sugar, according to the Australian Sugar Industry Alliance (ASA).

The ASA tendered a submission to the US Department of Commerce last week, urging it to alter its 'remedy' in relation to subsidised Mexican sugar, according to a spokesperson from the sugar industry organization.

"The US and Mexico have reached a tentative agreement in their present dispute over the amount of Mexican sugar entering the US, after US authorities found against Mexico in an anti-dumping countervailing duty case against Mexican sugar entering the US," an ASA spokesperson said in a statement.

"In return for the US not imposing anti-dumping and countervailing duties on sugar imported from Mexico, the Mexican government has agreed to limit the quantity of sugar it sells to the US.

"The quid pro quo is that Mexico will take the first opportunity to supply any additional sugar that may be required to meet shortfalls in US production."

A 'discriminatory fix': ASA

ASA chief executive officer Dominic Nolan said the fix was a discriminatory one.

"It effectively cuts Australia and other TRQ ('tariff rate quota') suppliers out of the opportunity they would otherwise have to meet these additional US supply needs.

"The trade remedy should place limitations around sugar that has received export subsidies or is dumped into the US market, not reward that practice with additional access at the expense of other suppliers."

The trading partners of the US are calling for that country to ensure the remedy is not discriminatory against the rights of TRQ suppliers, he said.

"Subsidisation is nothing more than an interventionist policy which distorts markets and prevents the world’s most efficient sugar and lowest cost producers from meeting US import needs."

According to the ASA, Australia is currently the world’s third-largest exporter of raw sugar and has been a historical supplier to US sugar refiners. The US is an important export market for Australia.

The terms of any settlement relating to Mexican sugar access to the United States will have a clear and direct adverse impact on the level and value of access for Australian sugar to the US.

“Ultimately, the Australian sugar industry is seeking greater market liberalisation for the global sugar market, and the proposed remedy by the US to the import of subsidised sugar from Mexico goes in exactly the wrong direction,” Mr Nolan said.

Source: farmonline.com.au