News | May 18, 1999

U.S. Corn Sweetener Makers Agree with Government Ruling

U.S. corn sweetener makers said yesterday that they were satisfied with the U.S. government's decision not to impose sanctions on Mexico after a year-long investigation into charges that the Mexican government unreasonably discouraged imports.

"Given the corn refiners' hope that this dispute may still be resolved through bilateral negotiations, and given the progress in our legal defense under the North American Free Trade Agreement (NAFTA) and in the World Trade Organization (WTO), we did not encourage the U.S. Trade Representatives to impose any sanctions on Mexico at this time," said Chick Connor, president of the Corn Refiners Association.

The Corn Refiners Association, Inc. is the national trade association representing the corn refining industry of the U.S. The group includes Archer Daniels Midland co., Cargill, Inc., Cerestar USA, Inc. and A.E. Staley Manufacturing, a subsidiary of Tate & Lyle.

Last Friday, the U.S. said it would further investigate U.S. industry charges that the Mexican government discouraged domestic soft drink bottlers from importing U.S. high-fructose corn syrup (HFCS).

HFCS is widely used in soft drink production. It has already replaced sugar as the primary soft drink sweetener in the U.S. and Mexico sugar producers fear it will do the same there.

In a prepared statement on Friday, U.S. Trade Representative Charlene Barshefsky said the U.S. had "reason to believe that the government of Mexico had supported and encouraged practices by the private sector that undermine the import and sale of U.S. HFCS in the Mexican market." She noted that the Mexican government failed to refute the allegations made by the U.S. corn sweetener producers.

The U.S. will further examine the role the Mexican government played in the matter, while continuing talks to try to resolve the cross-border sweetener dispute, she said.

Theoretically, the trade negotiators could have taken any of a number of actions against the Mexican sugar industry, including their share of the U.S. sugar import quota, Connor said.

Meanwhile, the trade negotiators and the corn refiners are continuing separate actions against Mexico under the NAFTA and through the WTO.