NCGA
Commends USTR for Filing of WTO Case on Mexican Beverage Taxes (3-18-04)
The National Corn Growers Association
(NCGA) applauds U.S. Trade Representative (USTR) Robert Zoellick’s
March 16 announcement that the United States is filing a World Trade
Organization (WTO) case against Mexico concerning the country’s
discriminatory soft drink tax.
NCGA President Dee Vaughan said the beverage taxes,
which have significantly curtailed U.S. exports of high fructose corn
syrup (HFCS), are nothing more than protectionist barriers to free
trade. He said enactment of the taxes in 2002 dealt a significant
blow to U.S. corn growers.
“Mexico was the U.S. corn industry’s top
HFCS market before the tax,” Vaughan said. “Corn growers
are losing $300 million a year in corn sales because of this, and
the tax clearly violates Mexico’s WTO obligations.”
According to Vaughan, the provision discriminates
against beverages that use HFCS or sweeteners other than cane sugar
by imposing a cost prohibitive tax of 20 percent on sales and 20 percent
on distribution. Zoellick said he attempted to resolve the dispute
through negotiations, but Mexican trade officials decided against
reformation of the taxes.
“While taking a case to the WTO is an extreme
measure and one of last resort, we feel the Mexican government has
given us no other option. We cannot let these types of actions go
unanswered and we need to ensure our trading partners comply with
the agreements they sign,” Vaughan concluded. “We thank
the continued efforts of Ambassadors Zoellick and Johnson for their
tireless work on this very difficult issue. Congress has also taken
a lead role and we thank Senator Charles Grassley (R-Iowa), Speaker
Dennis Hastert (R-Ill.), and Senator Bob Goodlatte (R-Va.), among
others, for their strong support.”