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Corn Refiners Allege Mexico Restrains High Fructose Corn Syrup Trad

Date Posted: April 6, 1998

The Corn Refiners Association (CRA) has filed with the Office of the United States Trade Representative a petition complaining of policies and practices of the Government of Mexico that it says denies fair and equitable market opportunities for U.S. exporters of high fructose corn syrup (HFCS).

Within 45 days of the April 2 filing, the U.S. Trade Representative must decide whether to initiate an investigation under Section 301 of the 1974 U.S. Trade Act. That section allows the United States to act directly against other countries if it determines after investigation that those countries have restrained trade.

Since the latter part of 1996, the government of Mexico has been involved in a multi-front effort to restrict market access for HFCS, the corn refiners said. In September of 1997, representatives of the Mexican sugar industry and the Mexican soft drink bottling industry, with the support and encouragement of the government of Mexico, entered into an agreement that restricts the soft drink industry's consumption of HFCS. In exchange for this limitation, the sugar industry agreed to supply sugar to the soft drink bottlers at below-market prices, the corn refiners said.

Charles F. Conner, president of the Corn Refiners Association, said, "The support given by the Government of Mexico to the restraint agreement is highly objectionable under any standard of fairness or equity in international trade. The Government of Mexico is engaged in a blatant attempt to restrict HFCS access in the Mexican market. The restraint agreement is a classic boycott by the Mexican sugar and soft drink industries. Such unreasonable practices are illegal and should not be condoned."

Conner also said, "We regret that our disputes over sweetener trade with Mexico have left us with no other option but to pursue a Section 301 petition. The Corn Refiners Association remains hopeful that the Mexican government and the Mexican sugar industry will rethink their aggressive campaign against high fructose corn syrup in order to avoid any short-term and long-term disruptions in Mexico's sugar access to the United States."

The corn refiners have been battling with Mexico for some time. Earlier this year, the association asked a North American Free Trade Agreement (NAFTA) panel to review Mexico's decision to impose final antidumping duties on high fructose corn syrup. Five other U.S. HFCS exporters -- Archer Daniels Midland Co., Cargill Inc., Cerestar USA, Corn Products International, and A.E. Staley Mfg. Co. -- joined in the request. A decision on that may not be forthcoming for more than a year.

On Jan. 24, Mexico imposed final antidumping duties on HFCS-55 and HFCS-42. The new HFCS-55 duties range from $55.37 to $175.50 per ton. The per-ton range for HFCS-42 is $63.75 to $100.60.

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