| NEW YORK, June 4
NEW YORK, June 4 Soda giant Coca-Cola Co and
major corn syrup makers have joined the political battle against
the U.S. sugar industry in recent weeks, as the deadline to
hammer out a years-long trade dispute with Mexico nears.
Representatives from Coca-Cola, corn syrup makers
Archer Daniels Midland Co and Cargill Inc, and
others met on May 10 with White House official Ray Starling,
special assistant to the president for agriculture, trade and
food assistance, said a number of people who attended the
meeting and some of the companies involved.
They warned against potential fall-out for their industries
if the United States and Mexico cannot agree to a new trade pact
and avert large duties on U.S. sugar imports from Mexico. The
deadline for an agreement is Monday.
For sugar buyers like Coca-Cola, a failure to come to a new
agreement could disrupt supplies and drive up prices. The United
States does not produce enough sugar for all its needs and
relies on imports to fill the shortfall. For U.S. corn syrup
makers, the escalating tensions put them under threat of a trade
war with their largest foreign market.
The two countries have been embroiled in the dispute for
three years. Talks between U.S. President Donald Trump's
administration and Mexico, which began in March, are seen as a
precursor to more complex discussions over NAFTA.
Under NAFTA, Mexico had free access to the U.S. sugar
market, but U.S. sugar refiners accused it of dumping subsidized
sugar, undercutting their business. In retaliation, the United
States slapped large duties on the Mexican sweetener, but a 2014
agreement suspended the tariffs in return for quotas and price
floors for Mexican sugar.
The U.S. sugar industry has said the 2014 deal failed to
control Mexican dumping and wants Washington to impose much
The sugar industry is known for its sway in Washington,
especially the politically-connected Fanjul family. But its
point of view on Mexican imports is not shared by sugar users
such as confectioners and soda-makers.
The May meeting was held to emphasize that failure to reach
a deal could threaten hundreds of thousands of jobs in
sugar-using industries, said Bill O'Connor of the Sweetener
Users Association, who attended the meeting.
TOP CORN SYRUP MARKET
If a deal is not reached, and the U.S. imposes tariffs,
Mexico has threatened retaliation, with corn syrup seen as a
likely target. U.S. agricultural exports to Mexico totaled $18
billion last year, according to the U.S. Trade Representative.
Mexico bought over 80 percent of U.S. fructose, or corn syrup,
exports, government data show.
"From our perspective, if we meet our sugar import needs
from elsewhere, we don’t gain any jobs, but if we lose our corn
syrup market in Mexico – that’s irreplaceable,” said John Bode,
head of the Corn Refiners Association, who also attended the
For Coca-Cola, an agreement is needed "so that we can
continue to expand the range of affordable food and beverage
choices available to consumers," Kate Rumbaugh, Vice President
of Government Relations for Coca-Cola North America, said in an
emailed statement to Reuters. The company confirmed it attended
A spokesman for Cargill also confirmed attendance. ADM
declined to comment. A White House spokeswoman declined to
Lobbying from America's farm belt has intensified to combat
"Big Sugar" as the deadline draws near, said two sources
familiar with the discussions. A coalition of Iowa farming
groups representing corn, soybean, pork and cattle industries
recently wrote to Department of Commerce Secretary Wilbur Ross,
saying agricultural exports are "in peril".
The U.S. sugar industry has said traditional cane refiners
like ASR, the maker of Domino Sugar owned by the Fanjuls, and
Imperial Sugar, owned by commodities firm Louis Dreyfus Co
, are being starved of supplies because Mexico is
exporting too much refined product.
Recent talks have centered on higher prices and ensuring
that raw sugar reaches those types of cane refiners, the sources
said. Critics say those terms would drive up prices and limit
Phillip Hayes, a spokesman for the American Sugar Alliance,
rejected the assertion and said: "Mexico’s predatory trade
practices have grossly distorted the domestic sugar market."
(Additional reporting by David Lawder in Washington and Karl
Plume in Chicago; Editing by Mary Milliken)