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The U.S.-Mexico Sugar Deal Signals Good Intentions
U.S. Commerce Secretary Wilbur Ross and Mexican Minister of Economy Ildefonso Guajardo Villarreal announced a preliminary agreement to avoid escalating a sugar trade war. Mexico will alter the composition of its sugar exports to the United States, agreeing to send more raw sugar and less refined sugar under its current quota limit.
U.S.-Mexico trade relations have been known to sour at various times over the terms of U.S. imports of Mexican sugar. Last fall, the U.S. sugar industry urged the Commerce Department to renegotiate the terms of a 2014 trade agreement that sets prices and quota for U.S. imports of Mexican sugar. They claimed Mexico was not respecting the terms of the agreement.
The Department subsequently issued a finding that Mexico was subsidizing its sugar imports, allowing exporters to dump product into the United States at prices below market value. To avoid the application of additional duties, Mexico agreed to cancel some export permits and enter talks with the Commerce Department toward a new agreement.
Meanwhile, both industries engaged in an arms race. U.S. industry threatened that American refiners would seek substitutes for Mexican sugar. Mexico began to prepare retaliatory barriers to U.S. exports of high fructose corn syrup.
After Commerce Secretary Ross twice extended the deadline, the Commerce Department and Mexico’s Economy Ministry appear to have reached a new agreement. It’s doubtful that all parties are very happy. Mexico is concerned that U.S. sugar continues to wield outsized political influence to protect its prices and that American refineries will leverage the new agreement to avoid competition from Mexican-produced refined sugar.
As negotiations to modernize NAFTA will get underway later this summer, observers worry that longstanding irritants such as sugar trade will take new talks off track from the get go. But the outcome, if not ideal in substance, at least signals a strong intent by both parties to find agreement. That shared intention should bode well for negotiations to expand and upgrade NAFTA.
TARIFFIED: Trade Talk with Matthew Rooney
This week, trade relations between the U.S. and India are continuing to escalate. Earlier this month, the U.S. stopped granting India special trade privileges by taking away the Generalized System of Preferences (GSP) program, and India has responded by enforcing more tariffs of its own. The George W. Bush-SMU Economic Growth Initiative Director Matthew Rooney breaks down the trade conflict: For more information on trade groups and the global economy, visit www.bushcenter.org/scorecard.
How Trade Spreads Holiday Cheer
It is projected that the average American household will spend more than $1,000 during the holidays this year.
Deporting Salvadorans May Lead to Economic Decline
We should think carefully about a policy whose major impacts are likely to be reductions in employment and economic activity here at home, and increased instability and lawlessness along our borders.
Bush Institute's Laura Collins Talks Immigration on Good Morning Texas
Last week, Deputy Director of Economic Growth at the George. W. Bush Institute Laura Collins spoke with Good Morning Texas about immigration myths. During the interview, Collins had the opportunity to set the record straight and address common misconceptions about legal immigrants living in America today. The segment was inspired from facts released earlier this fall by the Bush Institute in the third edition of America's Advantage: A Handbook on Immigration and Economic Growth. Watch the full Good Morning Texas interview here.