The Associated Press | Posted: Sunday, October 9, 2005 7:00 pm
WASHINGTON — Mexico violated trade rules in a dispute over corn sweeteners, a World Trade Organization has ruled.
At issue is a 20-percent tax that Mexico imposed on beverages made with imported sweeteners such as high-fructose corn syrup and sugar made from beets. Drinks made with Mexican cane sugar are exempt from the tax.
Mexico said that regardless of the WTO panel decision, unless it can reach an agreement with the United States, it will continue to do what it considers necessary to protect its sugar sector.
Mexico was a top market for high-fructose corn syrup from the U.S. before the tax was imposed in 2002. The tax made it too expensive to use the corn sweetener in soft drinks, and today, the U.S. share of the market is about 6 percent of pretax levels, according to the U.S. trade representative’s office.
“The WTO panel could not have been clearer: Mexico’s beverage tax is discriminatory and contrary to WTO rules,” U.S. Trade Representative Rob Portman said. “Mexico needs to eliminate this tax as soon as possible.”
The dispute over sugar and corn sweetener has cost U.S. corn refiners $944 million annually, according to the Corn Refiners Association.
“Our industry has long supported a solution that opens the sweetener market between the United States and Mexico and restores that market for U.S. corn sweeteners,” said association president Audrae Erickson.
Mexico imposed the tax after the WTO ruled against Mexican duties on imported corn syrup.
Officials of Mexico’s Economy Department publicly discussed imposing a 210 percent duty on high-fructose corn syrup in anticipation of the WTO’s action. In a statement Friday, officials were more reserved, saying only that they were weighing their options.