September 2001
Dispute Continues over U.S. Access to Mexican Sugar The U.S.-Mexico sugar dispute, in which Mexico is demanding increased access for its sugar in the U.S. market, remains a hot topic between the two nations. Mexico's demands for sugar access have taken on new urgency in light of announcement this month by the Mexican government that it will expropriate 27 of the country's near-bankrupt sugar mills in a last-ditch effort to rescue the ailing industry. The government plans to prepare the mills for quick sale to the private sector. The United States is expected to announce a global quota amount for sugar, as well as specific country allocations, this month. The U.S. quota amount for Mexico for 2001-2002 is expected to be around 200,000 tons, which is almost double last year's access but far short of the 600,000 tons Mexico claims it is due under the North American Free Trade Agreement (NAFTA). U.S. and Mexican sugar negotiators held a preliminary meeting in August that introduced recently confirmed Chief Agriculture Negotiator Allen Johnson with his Mexican counterpart, Luis de la Calle. This introduction will be followed by a series of meetings aimed at resolving the dispute. U.S. Trade Representative (USTR) Robert Zoellick recently signaled that he does not see a quick resolution to the bilateral dispute with Mexico over sugar access due to the current U.S. domestic policy debate over the farm bill and trade promotion authority. Unfortunately, the visit of Mexican President Vicente Fox to Washington, D.C., earlier this month did not result in a breakthrough in the sugar dispute. Fox's visit largely focused on non-trade issues like immigration and border problems with little discussion of trade issues, other than hailing the general benefits of NAFTA and calling for continued growth.
Canada Suspends Duty-Free Access for U.S. Breaded Cheese Sticks As of September 1, Canada no longer allows duty-free access for shipments of U.S. breaded cheese sticks. The Canadian action was taken due to Canada's frustration over the slow U.S. progress in restoring duty-free access for similar Canadian products. In 1999, the United States reclassified breaded cheese sticks as cheese products, making them subject to U.S. tariff-rate quotas for cheese - a move that effectively halted Canadian imports. Since last year, the two nations have been discussing options for resuming reciprocal duty-free access. In May, Canadian Trade Minister Pierre Pettigrew made the decision to suspend permits as of September 1, pending U.S. steps to restore Canadian access to the U.S market. Since then, Canada and U.S. producers of the cheese sticks have pressed the United States to restore Canada's access to the U.S. market. On September 12, the U.S. Trade Representative transmitted a notice to Congress of its proposed steps to resolve the issue. A layover period of 60 days is required under U.S. law before the U.S. legal changes can take effect.
U.S. and Mexico to Share Vital Food Safety Information Earlier this month, the United States and Mexico agreed to a cooperative arrangement that may reduce the incidence of food-borne illnesses on both sides of the border through expanding government programs, sharing information, and coordinating specific food safety activities. The agreement acknowledges that the enormous increase in food commodities trade between the nations merits increased efforts to improve the food supply safety in both countries. The agreement was signed by U.S. Health and Human Services Secretary Tommy Thompson, U.S. Department of Agriculture's (USDA) Under Secretary for Marketing and Regulatory Programs William Hawks, and Mexican officials from the ministries of health and agriculture. According to the plan, the U.S. Food and Drug Administration (FDA), USDA, and Mexico's Secretaria de Agricultura, Ganaderia, Desarrollo Rural, Pesca y Alimentacion (SAGARPA) and Secretaria de Salud (SSA) will share information on the sources of fresh produce and will investigate any contamination. In cooperation with SAGARPA, USDA's Food Safety and Inspection Service and Foreign Agricultural Service will monitor safety efforts of meat, poultry and egg products in both countries. The arrangement, which is to last for 10 years and may be extended for another 10 years, will also provide programs that harmonize food safety regulations, food inspection standards and information exchanges.
Cairns Group Calls for Increased Liberalization for Agriculture Trade A September meeting of the Cairns group of agricultural goods exporters resulted in a call for the World Trade Organization (WTO) members to commit to the complete integration of the agriculture sector into WTO rules. The group met in Punta del Este, Uruguay, to coordinate their positions on agriculture issues that will be considered at the WTO ministerial meeting in November in Doha, Qatar. At the conclusion of the meeting, Cairns group members summed up their views in a document that outlines a clear commitment to substantially improve market access, reduce domestic support and eliminate export subsidies. The Cairns group consists of Argentina, Australia, Bolivia, Brazil, Canada, Colombia, Costa Rica, Chile, Guatemala, Indonesia, Malaysia, New Zealand, Paraguay, the Philippines, South Africa, Thailand and Uruguay. In the days preceding the Cairns meeting, several WTO trade ministers met informally in Mexico City in order to identify critical issues and positions in a bid to ensure a successful ministerial meeting in Doha. USTR Zoellick and U.S. Agriculture Secretary Ann Veneman attended the Mexico City meeting to express the strong U.S. hope that a new trade round will be launched and will result in the further liberalization of agriculture trade. WTO ministers are hoping to launch a new round of negotiations in November, and to avoid the deadlock that occurred at the last ministerial meeting in Seattle in 1999.
Switzerland's Nestle and NZ Fonterra Plan Milk Alliance in the Americas New Zealand's newly formed dairy company Fonterra Cooperative Group Ltd., previously called Global Dairy Corp., recently announced an alliance with Switzerland's Nestle to form joint ventures in North and South America. This alliance is becoming active in the Western Hemisphere, acquiring two Mexican cheese companies, Lamesa and Eugenia, and taking on international sales responsibility for the California-based DairyAmerica. Fonterra and its new Swiss partner plan to increasingly use American milk in their joint ventures. Other ingredients would come mostly from New Zealand. Fonterra already has investments in Britain, Chile, Egypt, Germany, Malaysia, Saudi Arabia, Singapore, Sri Lanka, the United States and Venezuela. For more information on international policy issues, please contact Joanna Bonarriva at jbonarriva@idfa.org or Janet Nuzum at jnuzum@idfa.org. ### |
