July 31st, 2014

Mexico — The U.S. sugar industry is anxiously awaiting an August 25 preliminary determination by the Department of Commerce regarding their investigation of Mexican subsidies to its domestic industry that exports surplus sugar into the U.S. market. If the Mexican subsidies that we allege are confirmed, a countervailing duty that is equivalent to the subsidies could be imposed on sugar imported from Mexico.

This action would then be followed in September/October by a preliminary determination on the dumping of Mexican sugar into the U.S. market. Dumping is when a product is sold in a foreign market below what it is sold for in its domestic market or below its cost of production. If evidence of dumping is determined, a separate set of duties would then be assessed in addition to the countervailing duties.

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The importer of the sugar fromMexico would be responsible for paying the duties in order for the sugar to enter the U.S. Any duty monies collected would be held by the U.S. government until a final determination is announced early next year. If the final determination supports the preliminary determination, then any duty money already collected, or collected in the future, would have to be paid to the U.S. Treasury. No monies collected are given to the sugar industry to compensate it for the injury that has occurred.

The level of duties would determine the impact on sugar imports. If no subsidies or dumping were found, no duties would be assessed. If moderate subsidies and dumping were found, it could have a dampening effect on imports. If significant subsidies and dumping were found, it may make imports prohibitive. If the tariffs made Mexican sugar imports prohibitive, then the U.S. could turn to its other traditional foreign suppliers to supply our domestic needs.

Often times, foreign industries that have been found to use subsidies or dumping practices to gain access to the U.S. market ask their government to find an acceptable negotiated settlement between the two countries to avoid facing new tariffs. Only the two governments can conduct the negotiations that would provide a better solution for the industries in their respective countries. That option is always a possible alternative, and any such attempt should always receive serious consideration. If this were to occur, the two governments would have to find a solution that gains the approval of the petitioners (e.g., the U.S. sugar industry).

This is a very delicate process requiring a tremendous amount of work by industry leaders and legal counsel to pursue these cases and resolve the problem of surplus Mexican imports. Sugar policy opponents have been fighting our efforts every step of the way. Those sugar users have always wanted access to subsidized dumped sugar from foreign suppliers, so their activities come as no surprise. Thankfully, the decisions made by the Department of Commerce and the International Trade Commission in these cases are based on facts — not backhanded political pressures.

2014 Elections — When the new Congress is seated in January 2015, there will be at least 65 House and Senate members who will have vacated the seats they held in 2013. All of the state primaries have not yet taken place, and we must still weather through the November elections. Given the historically low congressional approval rating and partisan gridlock, anything can happen at the polls this year. There is no greater evidence of that than the surprising defeat of the House Majority Leader Eric Cantor in his primary election.

The bottom line is that there will be many new faces in the 114th Congress and plenty of work to educate them about U.S. sugar policy. Your THE SUGARBEET GROWER July/August 2014 11 support of your political action committees will be an essential element to that educational process. 

If the Democrats retain control of the Senate, we are likely to see continued battles between the House and Senate over the next two years.The biggest power shift that could occur is if the Republicans take control of the Senate. It is still too early to make any projections with certainty, but the balance in the Senate is likely to be very close, no matter who has the majority. If in fact the Republicans take control of the Senate, a Republican-controlled Congress is likely to bring huge pressures against the President for his remaining two years in office. He will need plenty of ink for his veto pen, and the fights between the two branches of government will have a significant impact on both the tone and substance of the 2016 presidential campaigns over the next two years.


2014 Cleavinger Intern — Our office was fortunate to be joined this summer (June 1-July 26) by this year’s Cleavinger Intern, Jake Chisholm, from Gary, Minn., an ag economics major at North Dakota State University and a grower with American Crystal Sugar. Jake provided weekly reports to the ASGA Board of Directors on his various activities and projects to help our lobbying efforts in support of the sugar provisions in the farm bill. He also focused on a PowerPoint presentation on biotechnology to help educate the public about the importance and safety of the technology.

2015 ASGA Annual Meeting — Save the dates of February 1-3 for the ASGA Annual Meeting at the Westin Hotel in Long Beach, Calif. Plan to join industry leaders and suppliers to gain greater insights from top speakers about key issues facing the beet sugar industry. Information and program updates will be available at www.americansugarbeet.org


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