International Happenings -
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.
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