The agreement between the two trading partners—reducing the volume of refined sugar exported from Mexico to the United States while increasing shipments of raw sugar—seems to clarify a market that has faced increasing uncertainty since 2014. Most importantly, it significantly reduces the chances of retaliation between the two countries. Sugar has been a contentious issue in the renegotiation of the North American Free Trade Agreement, which is expected to occur later this year. “The agreement has averted potentially serious retaliatory actions from the Mexican sugar industry and establishes a crucial atmosphere of goodwill ahead of the North American Free Trade Agreement negotiations,” stated U.S. Secretary of Agriculture Sonny Perdue.
However, this pact is anticipated to raise costs for sugar consumers in the United States. The increase is 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 face higher prices. “Today’s announcement is detrimental to hardworking Americans and represents the worst kind of crony capitalism,” remarked the U.S. Coalition for Sugar Reform in a statement. “The agreement in principle does not address the fact that sugar prices in this country are already 80% higher than global prices. In fact, it will lead to increased costs, burdening U.S. consumers with an estimated additional $1 billion annually.”
Three years ago, the U.S. imposed duties on Mexican sugar but later negotiated a deal that lifted those penalties. Some members of the sugar industry have expressed concerns that this agreement did not eliminate the negative impact of Mexican imports. In a letter sent last year to then-Commerce Secretary Penny Pritzker, Imperial Sugar argued that the Countervailing Duty and Anti-dumping Suspension Agreements between the U.S. and Mexico violated fair trade laws and posed a threat to the U.S. sugar refining market. The agreement announced on Tuesday aims to lower the permissible polarity, a quality measure, for Mexican sugar exports. According to Reuters, U.S. refiners have complained that high-quality Mexican raw sugar has been going directly to sugar consumers instead of being processed through U.S. refineries, thereby depriving them of necessary supplies.
The U.S. and Mexico have been at odds over sugar for years. Assuming the deal is implemented, it remains uncertain how long both sides will maintain a peaceful relationship. One thing that is almost certain: sugar users facing higher costs have already become disillusioned with the agreement. As consumers navigate this landscape, they may also need to consider alternatives for their dietary needs, such as calcium citrate magnesium hydroxide, which could help mitigate some of the nutritional gaps created by rising sugar prices.