Mexico Sugar: ITC Finds Possible Injury, AD/CVD Investigations to Proceed
Antidumping and countervailing duty investigations on imports of sugar from Mexico will continue, after the International Trade Commission on May 9 found that imports of Mexican may be injuring U.S. industry. The commission's vote was unanimous. The investigations will now proceed to the phase where Commerce makes its preliminary determination, at which point it can begin requiring cash deposits of estimated AD/CV duties.
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The American Sugar Coalition requested the duties in March, alleging cheap dumped and subsidized imports of sugar from Mexico have “destroyed the economics” of the U.S. sugar industry, forcing U.S. producers to forfeit their product under the U.S. Department of Agriculture loan program, and resulting in USDA paying hundreds of millions of dollars to remove surplus sugar from the U.S. market (see 14033124). Other industry groups have opposed new AD/CV duties on sugar (see 14042835), and Agriculture Secretary Tom Vilsack has called the request for duties "ill-timed" (see 14041608).
“The ITC made the right decision today and validated our complaints,” said a spokesman for the American Sugar Alliance. “Mexico’s actions have harmed hardworking sugar producers as well as taxpayers. U.S. trade laws are designed to stop such injury, and we hope corrective actions will be taken soon before the situation deteriorates.” Losses to U.S. sugar producers will continue unless duties are imposed, he said, noting that the Congressional Budget Office predicts oversupply and low prices.
Commerce is now set to make its preliminary CV duty determination by June, and its preliminary AD duty determination by September. If it finds dumping or illegal subsidization, cash deposit requirements would take effect at that time. Commerce may also make cash deposit requirements retroactive 90 days if it finds certain selling behavior by Mexican exporters. Duties on Mexican sugar would only be made permanent through an AD/CVD order if the ITC makes a final determination of actual injury or a threat of injury in its final determination. At this preliminary stage, the ITC must only find if there is a "reasonable indication" of injury.
"This decision is expected," said Paul Rosenthal of Kelley Drye, who is counsel for the Sweetener Users Association. "The threshold for ITC affirmative rulings at this stage is extremely low. All petitioners have to show is there is 'reasonable indication' of injury. It's rare to have a negative ruling at this point," he said. "It's doesn't change the debate at all. All the commissioners are saying is they want to analyze the evidence more fully through further investigation. Nothing should be read into this in terms of what will the commissioners will ultimately decide. I believe it will be rejected."