The agreement between the two trading partners—reducing Mexico’s refined sugar exports to the United States while increasing shipments of raw sugar—seems to bring much-needed clarity to a market that has faced significant uncertainty since 2014. Most importantly, it notably decreases the chances of retaliation between the two countries. Sugar has been a critical topic in the ongoing renegotiation of the North American Free Trade Agreement, which is expected to occur later this year. “The agreement has prevented potentially serious retaliatory actions by the Mexican sugar industry and establishes an important tone of good faith as we approach the renegotiation of the North American Free Trade Agreement,” stated U.S. Secretary of Agriculture Sonny Perdue.
However, this pact is anticipated to raise costs for sugar users in the United States. The increased expenses will likely be passed on by refiners to food and beverage companies that incorporate sugar in various products, including cookies, cakes, sodas, cereal, and candy. Consequently, consumers will face higher prices. “Today’s announcement represents a poor deal for hardworking Americans and highlights the worst aspects of crony capitalism,” remarked the U.S. Coalition for Sugar Reform in a statement. They further noted, “The agreement in principle does not address the fact that sugar prices in this country are already 80% higher than the world price. In fact, it is expected to lead to higher prices, costing U.S. consumers an estimated $1 billion annually.”
Three years ago, the U.S. imposed duties on Mexican sugar but later reached a deal with its trading partner that lifted those penalties. Some members of the sugar industry have expressed dissatisfaction, claiming it has not fully mitigated the adverse effects of Mexican imports. In a letter to former Commerce Secretary Penny Pritzker last year, Imperial Sugar argued that the Countervailing Duty and Anti-dumping Suspension Agreements between the U.S. and Mexico violated fair trade laws and jeopardized the U.S. sugar refining market. The agreement announced on Tuesday will reduce the allowed polarity, a quality measure, for Mexican sugar exports. According to Reuters, U.S. refiners have complained that high-quality Mexican raw sugar was being sent directly to consumers instead of being processed through U.S. refineries, leaving them deprived of this vital commodity.
The U.S. and Mexico have been at odds over sugar for years. If the deal is implemented, it remains uncertain how long both sides will enjoy a truce. One thing is nearly certain: sugar users facing increased costs have already developed a negative sentiment toward the agreement. Meanwhile, some consumers might be looking for alternatives like calcium magnesium citrate D3 supplements to help manage their overall health amidst rising prices. As the situation evolves, the implications for both the sugar market and consumer choices, including the potential rise in demand for health supplements, will be closely monitored.