WTO Rules Mexican Tax on HFCS Violates Commitments, NCGA Notes (6-29-05)
The National
Corn Growers Association applauds the World Trade Organization’s
(WTO) preliminary ruling against a Mexican tax on high fructose
corn syrup (HFCS) in beverages that has caused U.S. corn growers
to sustain considerable losses in the past eight years.
“We’re
hopeful this will bring the situation to resolution,” said
NCGA Chairman Dee Vaughan. “We’re hopeful that we can
resume exports to Mexico as soon as possible. We’ve been locked
out of the market entirely too long.”
Mexico established
a 20 percent tax on HFCS in 2002 after the WTO stuck down Mexican
duties on U.S. corn syrup that began in 1997. The WTO ruled that
the 20 percent tax violates Mexico’s WTO commitments. A final
ruling is expected in September.
“This
is great news,” said Fred Yoder, former president of NCGA.
“It’s the start of getting a solution to the problem.
It’s certainly not the finished product. We’ve known
all along it was an illegal act and protectionist.”
Since 1997,
the duties and tax have resulted in more than $1.4 billion in lost
corn sales, with $437 million (or 168 million bushels of corn) in
lost corn sales in 2004 alone, according to the Corn Refiners Association.
“We’re
looking forward to the final ruling.” Yoder said. “Mexico
is a great trading partner for commodity corn, but we need access
to the value-added corn market, for products like high fructose
corn syrup.”
“NCGA
has worked in partnership with the Corn Refiners Association for
many years, and we’re very appreciative of the relationship,”
Vaughan said. “NCGA is also thankful that the U.S. government
and the United States Trade Representative pressed the case with
the WTO.”