The U.S. Commerce Department said Friday it will initiate an investigation into a U.S. sugar producers’ anti-dumping and countervailing duty petition against Mexico.
The petition was filed with the Commerce Department on March 28. The U.S. International Trade Commission is also part of the investigation.
Dumping occurs when an overseas company sells a product in the United States at less than its fair value, while countervailing subsidies are financial aids from foreign governments that benefit the production of goods from overseas companies.
The petition was filed by the American Sugar Coalition and its individual member associations.
If the ITC determines that there is a “reasonable indication” that imports of sugar from Mexico harm or threaten to harm the U.S. sugar industry, the investigations will continue and Commerce will be scheduled to make its preliminary countervailing duty determination in June and its preliminary anti-dumping determination in September. If the ITC’s preliminary determinations are negative, the investigations will be terminated, the Commerce Department said.
However, the Washington-based Sweetener Users Association warned that “any actions to restrict Mexican imports will harm U.S. sugar-using companies that depend on a consistent and reliable supply of sugar.”
In 2013, U.S. imports of sugar from Mexico were valued at about $1.1 billion, according to the Commerce Department.
“Imports from Mexico are not responsible for reducing U.S. sugar production or the market share of U.S. sugar producers. The current market situation is well within the parameters of how the government-managed sugar market normally behaves,” SUA said.
“What is needed now is U.S. sugar reform to fix a program the sugar lobby has engineered and is characterized by tight government-imposed limits on both imported and domestic sugar supplies -- distorting the market and leading to severe fluctuations in supply and price,” the group added.