WRAPUP 2-U.S. readies duties on Mexican sugar in win for sugar lobby
(Adds reaction, background on sugar lobby)
By Adriana Barrera and Krista Hughes
MEXICO CITY/WASHINGTON Aug 26 (Reuters) - The United States is set to slap import duties as high as 17 percent on Mexican sugar in a victory for the powerful U.S. sugar industry but a blow to U.S. candy and soft drink makers who face paying more for the sweetener.
Mexican producers urged a deal to end the spat while the government hinted at retaliation, highlighting the potential for Tuesday's Department of Commerce ruling to increase tensions in a months-long trade dispute over claims cheap subsidized sugar is flooding the heavily protected U.S. market.
The duties mean companies like sweet makers Hershey Co and Mondelez International Inc will have to pay up to 5 cents per pound extra for imported sugar, based on current prices. Mexican imports are estimated at 2.1 million short tons for the 2013/14 crop year that runs through Sept. 30.
The preliminary decision could still be overturned but is only the first stage of a case which could lead to a further round of levies. It underscores the influence that U.S. cane and beet growers, a relatively small but politically engaged sector in U.S. farming, have over domestic farm and trade policy.
Out of a total 2.2 million U.S. farms, less than 4,700 grow cane and beet, according to data from the Washington-based Heritage Foundation, a conservative think tank.
But the sector accounts for a third of the crop industries' campaign donations and 40 percent of crop industries' lobbying expenditures, it said.
Tuesday's decision is a victory for the American Sugar Alliance, which has pushed for an end to free trade with Mexico since sweetener was included in the North American Free Trade Agreement (NAFTA) six years ago and said Tuesday's decision validated its concerns about a recent spike in imports. Continuación...