US, Mexico reach sugar deal

The US and Mexican governments reached a new agreement in principle on trade in sugar, but US producers have failed to endorse the deal.

WASHINGTON, UNITED STATES (REUTERS) - The US and Mexican governments struck a trade deal on sugar on Tuesday (June 6) after extending the deadline.

"We remain confident that this deal defends American workers across many industries and is the right way to ensure stability and growth." said US Department of Commerce Secretary Wilbur Ross.

The agreement calls for Mexico to change the proportion of its export of raw and refined sugar. But it leaves Mexico's overall access to the US sugar market unchanged.

"The agreement that we have reached, in principle, continues to allow Mexican sugar exports to access the US market at the same volumes they were traditionally exported. There is a difference in terms of the split between raw sugar and refined sugar. Traditionally, Mexican exports have been exported to the United States in a ratio of 60 per cent raw, 40 per cent refined. The new agreement takes those to new levels, to 70 - 30." said Mexican Economy Minister Ildefonso Guajardo.

The deal also lifts the price the US will pay for Mexican raw sugar.

But US sugar producers refuse to endorse the deal. The agreement still has to go through a final drafting stage. Ross said he hopes that will make it easier for them to back it.