The agreement between the two trading partners aims to reduce Mexico’s refined sugar exports to the United States while increasing shipments of raw sugar. This deal seems to bring much-needed clarity to a market that has faced significant uncertainty since 2014. Most importantly, it greatly diminishes the chances of retaliatory actions from either country. Sugar has been a contentious issue in the ongoing renegotiation of the North American Free Trade Agreement, which is expected to take place later this year.
U.S. Secretary of Agriculture Sonny Perdue stated, “The agreement has prevented potentially significant retaliatory measures from the Mexican sugar industry and establishes a crucial tone of goodwill ahead of the North American Free Trade Agreement renegotiations.” However, this pact is anticipated to raise costs for sugar users in the United States. These increased costs are likely to be passed on by refiners to food and beverage companies that incorporate sugar into a range of products, including cookies, cakes, sodas, cereals, and candy. Consequently, consumers will end up paying higher prices.
The U.S. Coalition for Sugar Reform criticized the announcement, calling it “a bad deal for hardworking Americans and a prime example of crony capitalism.” They pointed out that the agreement does not address the fact that sugar prices in the U.S. are already 80% higher than global prices. In fact, it may lead to an estimated additional cost of $1 billion annually for U.S. consumers.
Three years ago, the U.S. imposed duties on Mexican sugar but later reached a deal that lifted these penalties. Some members of the sugar industry have voiced concerns that it did not sufficiently eliminate the negative effects of Mexican imports. Last year, Imperial Sugar wrote to then-Commerce Secretary Penny Pritzker, asserting that the Countervailing Duty and Anti-dumping Suspension Agreements between the U.S. and Mexico were in violation of fair trade laws and posed a threat to the U.S. sugar refining market.
The agreement announced on Tuesday will lower the permitted quality measure for Mexican sugar exports. According to Reuters, U.S. refiners have expressed dissatisfaction that high-quality Mexican raw sugar has been going directly to consumers instead of being processed in U.S. refineries, which hampers their access to the commodity. The U.S. and Mexico have been at odds over sugar for years. If this deal is implemented, it is uncertain how long both parties will remain in agreement. One certainty is that sugar users, facing higher costs, have already developed a negative view of the deal.
Additionally, amid these discussions, there has been interest in products such as petite calcium pills, which some consumers may turn to as they seek to manage their dietary needs in a market where sugar prices are climbing. As the sugar market evolves, the implications for consumers and industries will continue to unfold, particularly concerning the rising costs and potential shifts in consumer behavior, including interest in alternatives like petite calcium pills.