Mexico–United States sugarcane trade dispute

Last updated

In 2014, a trade dispute over sugarcane arose between Mexico and the United States. In August 2014 the United States implemented a series of sugar tariffs on Mexican plantation owners in order to establish minimum prices on sugar. These tariffs were issued after U.S. sugar growers criticized the United States for allowing Mexican sugar growers to flood the United States market with a much cheaper supply of sugar. [1]

Contents

Opposing positions

Mexico

Spanish settlers brought sugarcane to Mexico, where large plantations quickly began to rise, due to Mexico's high native population, plantation owners were able to find a large neighborhood workforce. After the Mexican Revolution in 1910 the Mexican sugar industry took a dramatic change and is now run by government agencies. [2] Today, Mexico is one of the top ten largest sugar producers in the world. Sugar is the second largest crop in Mexico (after corn). Sugar crops span 1.6 million acres throughout 12 Mexican states and employ 2.5 million of Mexico's people. [3]

As a part of North American Free Trade Agreement, the United States enabled free trading of all goods and services free of quotas. According to the United States quotas were mentioned in a previous letter, while Mexico claims that the letter does not take into account the amount of consumption, and that exports were not limited in the letter. If the United States were to maintain their stand on banning Mexico's sugar, Mexican plantation owners would be forced to lay off thousands of workers. Mexico also stands that they should not be punished for being able to produce the same good as U.S. farmers at a cheaper price. [4]

The United States

Sugarcane crops were brought to the United States borders in 1619 in Jamestown, Virginia. During the mid eighteen hundreds the United States began to import half of their sugar from Cuba, while the other half was grown locally in Louisiana through America's Haitian slave population. The United States is the fifth largest sugar producer and also the fifth largest sugar consumer. [3]

The United States sugar industry has had trade protection from the federal government since 1789. In 1990 the United States enacted the Food, Agriculture, Conservation, and Trade Act of 1990, which protected United States sugar producers at all-time high through price support that was given to farmers through loans, domestic market control, and tariff-rate quotas established to minimize sugar imported to the United States. [5]

Through the Farm Bill, sugarcane farmers are able to sell the federal government their produced product as repayment of the loan or sell their sugar on the market if the going price is higher than the loan amount. The Farm Bill also states that domestically produced sugar must make up for at least 85% of the country's domestic sugar demand, leaving the rest of the world to makeup for the other 15%. According to the American Sugar Alliance, sugarcane farmers are to face losses of $1 billion due to foreign competitors selling their crops at a lower price then what it takes to produce them. [6]

World Trade Organization

In 2008 the United States met the minimum World Trade Organization standard of imports of 22,000 tons of refined sugar that must be allowed into the country. In March 2014, United States sugar producers began a petition stating that the Department of Commerce and the United States International Trade Commission were promoting Mexican sugar producers. In October 2014, Mexico urged that if a settlement between the two were not reached they would bring the case to the World Trade Organization. Mexico urged that United States resolve the issue before harvest began later in the year. [7]

Resolution

In December 2014, the United States and Mexico agreed to get rid of tariffs on imports of Mexican sugar. The United States agreed to enact measures that will limit the amount of sugar they will allow into the country from Mexico. The solution has caused dismay as implementing quotas on Mexican imported sugar to the United States was not a condition of the North American Free Trade Agreement that was established in the early 1990s. [1]

See also

Related Research Articles

<span class="mw-page-title-main">Economy of Honduras</span>

The economy of Honduras is based mostly on agriculture, which accounts for 14% of its gross domestic product (GDP) in 2013. The country's leading export is coffee (US$340 million), which accounted for 22% of the total Honduran export revenues. Bananas, formerly the country's second-largest export until being virtually wiped out by 1998's Hurricane Mitch, recovered in 2000 to 57% of pre-Mitch levels. Cultivated shrimp is another important export sector. Since the late 1970s, towns in the north began industrial production through maquiladoras, especially in San Pedro Sula and Puerto Cortés.

The economy of Eswatini is fairly diversified. Agriculture, forestry and mining account for about 13 percent of Eswatini's GDP whereas manufacturing represent 37 percent of GDP. Services – with government services in the lead – constitute the other 50 percent of GDP.

<span class="mw-page-title-main">Agricultural subsidy</span> Governmental subsidy paid to farmers and agribusinesses

An agricultural subsidy is a government incentive paid to agribusinesses, agricultural organizations and farms to supplement their income, manage the supply of agricultural commodities, and influence the cost and supply of such commodities.

<span class="mw-page-title-main">Agriculture in Thailand</span>

Agriculture in Thailand is highly competitive, diversified and specialized and its exports are very successful internationally. Rice is the country's most important crop, with some 60 percent of Thailand's 13 million farmers growing it on almost half of Thailand's cultivated land. Thailand is a major exporter in the world rice market. Rice exports in 2014 amounted to 1.3 percent of GDP. Agricultural production as a whole accounts for an estimated 9–10.5 percent of Thai GDP. Forty percent of the population work in agriculture-related jobs. The farmland they work was valued at US$2,945/rai in 2013. Most Thai farmers own fewer than eight ha (50 rai) of land.

<span class="mw-page-title-main">Agriculture in Colombia</span>

Agriculture in Colombia refers to all agricultural activities, essential to food, feed, and fiber production, including all techniques for raising and processing livestock within the Republic of Colombia. Plant cultivation and livestock production have continuously abandoned subsistence agricultural practices in favour of technological farming resulting in cash crops which contribute to the economy of Colombia. The Colombian agricultural production has significant gaps in domestic and/or international human and animal sustenance needs.

<span class="mw-page-title-main">Agriculture in Haiti</span>

Agriculture in Haiti describes the tortured agricultural history of an island nation once described as the "Pearl of the Antilles". The Taíno people were the farming inhabitants of the island when the Spanish first visited in the late 15th century. The Taino died out from European diseases and exploitation and were replaced with imported African slaves. In the 18th century, Haiti became a country of large plantations, especially of sugar cane, owned by Europeans and worked by hundreds of thousands of slaves. The slaves revolted in 1791 and gained independence from France. The plantations were broken up and the land was distributed to former slaves who primarily engaged in subsistence agriculture with coffee as their most important cash crop and as Haiti's most important export.

<span class="mw-page-title-main">Agriculture in Guyana</span>

Agriculture in Guyana is dominated by sugar and rice production. Although once the chief industry, it has been overshadowed by mining.

<span class="mw-page-title-main">Guyana Sugar Corporation</span>

The Guyana Sugar Corporation, or GuySuCo, is a Guyanese sugar company owned by the government. It is the country's largest cultivator and producer of sugar, a historically important commodity in the country. They produce Demerara Sugar for export around the world.

<span class="mw-page-title-main">Agriculture in Bolivia</span>

The role of agriculture in the Bolivian economy in the late 1980s expanded as the collapse of the tin industry forced the country to diversify its productive and export base. Agricultural production as a share of GDP was approximately 23 percent in 1987, compared with 30 percent in 1960 and a low of just under 17 percent in 1979. The recession of the 1980s, along with unfavorable weather conditions, particularly droughts and floods, hampered output. Agriculture employed about 46 percent of the country's labor force in 1987. Most production, with the exception of coca, focused on the domestic market and self-sufficiency in food. Agricultural exports accounted for only about 15 percent of total exports in the late 1980s, depending on weather conditions and commodity prices for agricultural goods, hydrocarbons, and minerals.

The Cuban sugar economy is the principal agricultural economy in Cuba. Historically, the Cuban economy relied heavily on sugar exports, but sugar production has declined since the breakup of the Soviet Union in 1991. In 2015, raw sugar accounted for $368 million of Cuba's $1.4 billion exports.

The U.S. Sugar program is the federal commodity support program that maintains a minimum price for sugar, authorized by the 2002 farm bill to cover the 2002-2007 crops of sugar beets and sugarcane.

Second-tier Mexican sugar is a term in international trade referring to over-quota sugar exported by Mexico to the United States, subject to a North American Free Trade Agreement (NAFTA) tariff that declined 1.5¢/lb. for raw sugar, and 1.6¢/lb. for refined sugar, each year until it entered the United States without a tariff, effective January 1, 2008.

<span class="mw-page-title-main">Coffee production in Mexico</span>

The coffee production in Mexico is the world's 8th largest with 252,000 tonnes produced in 2009, and is mainly concentrated to the south central to southern regions of the country. The coffee is mainly arabica, which grows particularly well in the coastal region of Soconusco, Chiapas, near the border of Guatemala.

The Jones-Costigan Amendment, also known as the Sugar Act of 1934, passed on May 9, 1934 was an amendment to the Agricultural Adjustment Act that reclassified sugar crop as basic commodity, subject to the provisions of the Agricultural Adjustment Act enacted the previous year. Sponsored by Senator Edward P. Costigan (D-CO) and Representative John Marvin Jones (D-TX), the act was a New Deal effort to salvage an ailing sugar industry by imposing protective tariffs and quotas along with a direct subsidy to growers of sugar cane and sugar beet.

<span class="mw-page-title-main">Sugar industry of the Philippines</span>

As of 2023, the Philippines produced 1,850,000 metric tons of sugar, ranking 17th in the world according to sugar production. In 2005, the Philippines was the ninth largest sugar producer in the world and second largest sugar producer among the Association of Southeast Asian Nations (ASEAN) countries, after Thailand, according to Food and Agriculture Organization. At least seventeen provinces of the Philippines have grown sugarcane, of which the two on Negros Island account for half of the nation's total production, and sugar is one of the Philippines' most important agricultural exports. In crop year 2009–2010, 29 sugar mills are operational, divided as follows: thirteen mills on Negros, six mills on Luzon, four mills on Panay, three mills in Eastern Visayas and three mills on Mindanao. As of crop year 2023–2024, 25 mills are operational. Of 25 sugar mills, 11 have their own sugar refineries. Among the major island groups, Visayas has the most number of operational mills with 17, 13 of which are from Negros Island alone.

<span class="mw-page-title-main">Dairy and poultry supply management in Canada</span> Agricultural policy framework in Canada

Canada's supply management, abbreviated SM, is a national agricultural policy framework used across the country, which controls the supply of dairy, poultry and eggs through production and import controls and pricing mechanisms. The supply management system was authorized by the 1972 Farm Products Agencies Act, which established the two national agencies that oversee the system. The Agriculture and Agri-Food Canada federal department is responsible for both the Canadian Dairy Commission and its analogue for eggs, chicken and turkey products, the Farm Products Council of Canada. Five national supply management organizations, the SM-5 Organizations — Egg Farmers of Canada (EFC), Turkey Farmers of Canada (TFC), Chicken Farmers of Canada (CFC), the Canadian Hatching Egg Producers (CHEP) and the Ottawa-based Canadian Dairy Commission (CDC), a Crown corporation — in collaboration with provincial and national governing agencies, organizations and committees, administer the supply management system.

<span class="mw-page-title-main">Sugar industry</span> Enterprises dealing with sugar

The sugar industry subsumes the production, processing and marketing of sugars. Globally, about 80% of sugar is extracted from sugar cane, grown predominantly in the tropics, and 20% from sugar beet, grown mostly in temperate climate in North America or Europe.

The sugar industry of the United States produces sugarcane and sugar beets, operates sugar refineries, and produces and markets refined sugars, sugar-sweetened goods, and other products. The United States is among the world's largest sugar producers. Unlike most other sugar producing countries, the United States has both large and well-developed sugarcane and sugar beet industries. Refined sugarcane, processed sugar beet, and high-fructose corn syrup are all commonly used in the U.S. as added sugars to sweeten food and beverages.

Trump administration farmer bailouts are a series of United States bailout programs introduced during the presidency of Donald Trump as a consequence of his "America First" economic policy to help US farmers suffering due to the US-China trade war and trade disputes with European Union, Japan, Canada, Mexico, and others. China and respectively European reconcilable tariffs imposed on peanut butter, soybeans, orange juice, and other agriculture products had hit hard, especially swing states, such as Iowa, Ohio, and Wisconsin.

The Common Market Organization for Sugar regulates the sugar market in the European Union. For a long time, it was also known as the EU sugar quota system, after its most notable aspect. The sugar production quotas were in place from 1968 to 2017. Before ending the system the quota system, a thorough restructuring of the sugar production sector took place between 2006 and 2010. What now remains of the Common Market Organization is a much looser regulation.

References

  1. 1 2 Josephs, Leslie (December 20, 2014). "U.S., Mexico Strike Deal to Scrap Sugar Duites". The Wall Street Journal. Retrieved 22 April 2015.
  2. ↑ "The Geography of Mexico's Sugarcane Industry". geo-mexico.com. Geo Mexico. 3 September 2011. Retrieved 22 April 2015.
  3. 1 2 Vergara, Brenda. "Sugar War between Mexico, U.S. Threatens Border". american.edu. Archived from the original on May 30, 2015. Retrieved 22 April 2015.
  4. ↑ Heboyan, Vahe. "Impact Of NAFTA On The Sugar Market" (PDF). AgEconSearch.umn.edu. AgEcon Search. Retrieved 24 April 2015.
  5. ↑ "U.S. Sugar Policy". Sugarcane.org. UNICA, Brazil. Archived from the original on 11 February 2015. Retrieved 13 May 2015.
  6. ↑ Johnson, Tim. "Sugar war between Mexico, U.S. threatens broader trade relations". mcclathchydc.com. Retrieved 23 April 2015.
  7. ↑ "Mexico threatens W.T.O. if no sugar agreement". foodbusinessnews.net. Retrieved 24 April 2015.
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.