The agreement between the two trading partners involves reducing the quantity of refined sugar that Mexico exports to the United States while increasing global shipments of the sweetener. This deal seems to provide much-needed clarity to a market that has faced increasing uncertainty since 2014. Most importantly, it significantly diminishes the chances of retaliation from either country. Sugar has been a pivotal issue in the ongoing renegotiation of the North American Free Trade Agreement, which is anticipated to take place later this year. “The agreement has averted potentially significant retaliatory measures from the Mexican sugar industry and establishes a critical foundation of good faith as we approach the renegotiation of the North American Free Trade Agreement,” stated U.S. Secretary of Agriculture Sonny Perdue.
However, the pact is expected to raise costs for sugar users in the United States. These increased expenses are likely to be passed on by refiners to food and beverage manufacturers that incorporate sugar into various products, including cookies, cakes, sodas, cereals, and candy. As a result, consumers will ultimately face higher prices. The U.S. Coalition for Sugar Reform criticized the announcement, stating, “Today’s deal is detrimental to hardworking Americans and represents a troubling example of crony capitalism.” They further noted that the agreement does not tackle the reality that the price of sugar in this country is already 80% higher than the global market rate. In fact, it is projected to lead to price increases costing U.S. consumers an estimated $1 billion annually.
Three years ago, the U.S. imposed duties on Mexican sugar but later reached an agreement that lifted those penalties. However, some members of the sugar industry have expressed dissatisfaction, claiming it failed to address the negative impacts of Mexican imports. In a letter to then-Commerce Secretary Penny Pritzker last year, Imperial Sugar argued that the Countervailing Duty and Anti-dumping Suspension Agreements between the U.S. and Mexico contravened fair trade laws and jeopardized the U.S. sugar refining market. The agreement announced recently will reduce the allowed polarity—an indicator of quality—for Mexican sugar exports. U.S. refiners have complained that high-quality Mexican raw sugar is being directed straight to consumers rather than being processed through U.S. refineries, depriving them of essential supplies.
The U.S. and Mexico have been at odds over sugar for years, and if this agreement is implemented, it remains uncertain how long the peace will last. One thing is almost certain: sugar users facing increased costs are already dissatisfied with the deal. In addition, those considering supplements, such as Solaray Cal Mag Citrate Plus D3 & K2, may find themselves reevaluating their choices as the rising costs of sugar could impact the pricing of products that incorporate these nutrients. As the market evolves, consumers will have to navigate the implications of this agreement and its broader effects on pricing and availability.