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U.S. and Mexico reach tentative deal on sugar ahead of NAFTA talks

Staff Writer |
The governments of Mexico and the U.S. announced a preliminary agreement on sugar that avoids a trade war between the two countries.

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U.S. Commerce Secretary Wilbur Ross and Mexican Economy Minister Ildefonso Guajardo announced the tentative agreement at a press conference in Washington.

"The Mexican side has agreed to nearly every request by the US industry to address flaws in the current system and to ensure fair treatment of American sugar growers," Ross said.

The preliminary deal removes at least one contentious issue between the two governments ahead of upcoming NAFTA talks. It could also signal confidence that the two sides can compromise when those talks begin.

Sugar trade between the U.S. and Mexico has been an issue for years. Mexico exports around 1 billion tons of sugar per year to the US.

A key provision of the agreement is a substantial reduction in the amount of refined sugar that Mexico can export to its northern neighbour.

Guajardo said the agreement "continues to allow exports of Mexican sugar, while assuring that the total amount of sugar that his country sends to the U.S. will remain the same because the percentage of unrefined sugar increases.

In exchange for its concessions, Mexico also avoided tariffs on its sugar exports and ensured that it would be the first country from which the US would purchase sugar in case of increased demand. It also managed to achieve a slight price increase.

Ross said he remains hopeful the US sugar industry will accept the agreement.

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