A Review of NAFTA Disputes: Sugar and Agricultural-Based Sweeteners P. Lynn Kennedy and Daniel Petrolia.

Slides:



Advertisements
Similar presentations
Copyright ©2002, South-Western College Publishing International Economics By Robert J. Carbaugh 8th Edition Chapter 6: Nontariff Trade Barriers.
Advertisements

International Trade and Trade Restrictions Presented By: Nathan Groce And Josh Thurman.
Economic Implications of the AUS-FTA for U.S. Dairy Markets and Policy Presentation by Joseph Balagtas at the Silverado Symposium on Agricultural Policy.
First edition Global Economic Issues and Policies PowerPoint Presentation by Charlie Cook Copyright © 2004 South-Western/Thomson Learning. All rights reserved.
Understand the role of business in the global economy. 1.
Lynn Kennedy Department of Agricultural Economics & Agribusiness Louisiana State University A&M College and LSU AgCenter.
SADC FREE TRADE ARRANGEMENT BENEFITS & OPPORTUNIES Presented by: Sipho Maluleka Department of Agriculture Directorate: International Trade Desk: Africa.
International and Regional Agreements Affecting Trade.
Government Distortions in International Trade Chapter 6.
Application: International Trade
Introduction to Business
7. Canada and the United States 7.1. The Canada-US Relationship 7.2. Trade and NAFTA 7.3. Defending North America 7.4. North American Security and Terrorism.
Bottlenecks to Free Trade 17 th Annual “Farming for Profit?” Conference Moose Jaw, Saskatchewan June 27, 2010 Flynn Adcock Center for North American Studies.
INTERNATIONAL TRADE Principles of Microeconomic Theory, ECO 284
China: the expanding market for world soybean production
The U.S. and World Sugar Industries under the EU and DOHA Trade Liberalization Won W. Koo   Chamber of Commerce Distinguished Professor and Director  
Sugar Policy in the United States: Pressures For Reform, Lessons From Europe German Marshall Fund November 10, 2005 Thomas Earley Executive Vice President.
New Trade Agreements: Implications for U.S. Sugar P. Lynn Kennedy Louisiana State University.
P. Lynn Kennedy Louisiana State University. No Net Cost Directive PRIOR LAW/POLICY Requires USDA to the maximum extent practicable to operate the sugar.
1 NAFTA and the Saga of the Corn Joe Sun Chee Qiujia Chen Angela Dixon.
Free Trade versus Protectionism Chapter Benefits of International Trade uIncreased variety of goods uLower costs uIncreased competition and better.
Free Trade versus Protectionism
Chapter 18: International Trade. McGraw-Hill/Irwin Copyright  2007 by The McGraw-Hill Companies, Inc. All rights reserved Trade Facts Principal.
 MUNICIPAL LEVEL;  PROVINCIAL/STATE LEVEL;  FEDERALLY/NATIONAL LEVEL;  INTERNATIONALLY (E.G., EUROPEAN UNION).
The Global Context of Business
The Global Context of Business
Tailoring the U.S. Sugar Program for the Future Jackie Theriot Louisiana Farm Bureau – Executive Committee Sec./ Treasurer.
Near Term Prospects for the U.S. Sugar Industry Edward Evans, Sikavas Na Lampang and John VanSickle International Agricultural Trade and Policy Center.
“Normalizing Trade Relations with Cuba: GATT- compliant Options for the Allocation of the U.S. Sugar Tariff-rate Quota” Presented By: Devry S. Boughner.
Chapter 17SectionMain Menu Why Nations Trade Take a look at your stuff. Clothes, backpacks, calculators etc. Where was it made? List the countries. Why.
The Foreign Economic Activity of Enterprises Of Dadoboeva Farangis.
TOPIC #7 Canada and International Trade Agreements.
International Policy Live in a global economy where: –Interdependence means that any policy decisions made by one country has a impact on the U.S. –Many.
Expanding Globalization Refer to the three cartoons in Chapter 10, p 236. What common message, if any, is being presented?
CHILEAN SCENARIO ON FREE TRADE OR ASSOCIATION AGREEMENTS 1.FTA CURRENTLY IN EFFECT: UNITED STATES OF AMERICA (negotiations began in The FTA became.
The Move to Freer Trade Trade Agreements. A Move to Freer Trade Post-war Re-building (1946). A international financial structure was needed to deal re-building.
Agricultural and Food Policy Information Workshop Food & Agribusiness Research I Trade Disputes in an Unsettled Industry: Mexican Sugar.
 Background Information  Disadvantages of NAFTA  Advantages of NAFTA  Trouble in Juarez  Conclusion.
1 Chapter 21 International Trade and Finance ©2004 Thomson/South-Western Key Concepts Key Concepts Summary Summary Practice Quiz.
AG -1 © WTO – OMC 2012 The WTO Agreement on Agriculture Serafino Marchese, Chief, Training and Capacity Building Section WTO Institute for Training and.
# McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved. International Trade and Exchange Rates 20.
North American Free Trade Agreement
Pearson Education, Inc. © 2006 CHAPTER 8 Trade INTERNATIONAL RELATIONS Seventh Edition Joshua S. Goldstein.
THE CENTRAL AMERICAN SUGAR INDUSTRY: EFFICIENCY AND COMPETITIVENESS.
Test Review Chapters 4 & 5. Income can go to: Taxes Savings consumption.
Unit 15 Why Nations Trade.. Section 1-4 Why Nations Trade In a recent year, about 8 percent of all the goods produced in the United States were exported,
SSEIN1: The student will explain why individuals, businesses, and governments trade goods and services. SSEIN2: The student will explain why countries.
Today’s Schedule – 12/7 Trade Barriers and Agreements PPT
International Trade Created by: Ms. Daniel. We talk about trade in terms of trade between nations, but the actual trade is between individuals and businesses.
International Trade. Trade allows nations to specialize in some products and then trade them for goods and services that are more expensive to produce.
Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
North American Free Trade Agreement.  NAFTA was established on December 17,1992  It was signed by Brian Mulroney (Canada), Carlos Salinas de Gortari.
Trade, Environment and the WTO UNECA Workshop on Trade and Environment Dakar, Senegal June 2006 Benjamin Simmons Economics and Trade Branch Division.
N.A.F.T.A North American Free Trade Agreement. The Agreement: North American Free Trade Agreement (NAFTA) established a free-trade zone in North America;
The United States in the Global Economy COI1 Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior.
International Trade in Used Vehicles Can trade between wealthy and poorer countries damage the environment locally or globally? The pollution haven hypothesis.
Exploring Your Trans-Pacific Partners
International Economics
Renegotiation of NAFTA
Global Trading Organizations
North American Free Trade Agreement
FTAA, WTO, FARM LEGISLATION MAY23-24,2002
International Economics By Robert J. Carbaugh 9th Edition
North American Free Trade Agreement
NAFTA Explain the functions of the North American Free Trade Agreement (NAFTA). NAFTA is the North American Free Trade Agreement between the U .S., Canada.
Sugar Situation.
International Economics and Trade
DIRCO PRESENTATION ON The SADC-EU Economic Partnership Agreement (EPA) Impact on South Africa’s Foreign Policy.
International Trade Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin.
The EU-US Agricultural Framework Agreement
Presentation transcript:

A Review of NAFTA Disputes: Sugar and Agricultural-Based Sweeteners P. Lynn Kennedy and Daniel Petrolia

OUTLINE n Overview of NAFTA as it relates to sugar and HFCS n Discussion of the current environment with respect to various factors related to production and consumption n Various disputes stemming from the Agreement will be outlined. In particular Net Surplus Production Status and issues related to HFCS dumping n Implications of the Agreement and current disputes

THE AGREEMENT n Fifteen year transition period n Role of HFCS n Rules of Origin

THE TRANSITION n Mexico will align its tariff regime with that of the United States by the end of year six of the agreement, implementing a TRQ with rates equal to those of the United States n During years 7-15, the remaining United States and Mexican tariffs on bilateral sugar trade will be reduced to zero n At the end of year 15 of the agreement, free trade in sugar between Mexico and the United States is scheduled to exist

THE TRANSITION n By year seven, Mexico will adopt the United States second-tier tariff as a common border protection to non-NAFTA sugar n Mexico’s maximum access to the United States will increase to 250,000 tons. With respect to Mexico, the United States second-tier tariff (13.6 cents in year 7) will be eliminated by year 15 n In the fifteenth year, sugar trade between the United States and Mexico is unrestricted and duty-free

NET SURPLUS PRODUCER STATUS n Between years one and fifteen, Mexico’s allowable duty-free sugar exports to the United States, and United States duty-free exports to Mexico, will be the greater of: -7,258 metric tons -The quantity currently allocated by the U.S. under the sugar program to “other specified countries and areas” -The quantity allowed under the definition of “net surplus producer.”

EXECUTIVE AGREEMENT and TWO- YEAR UNLIMITED ACCESS CLAUSE n Originally negotiated prior to modifications executed by the Executive Agreement, Mexican access in year seven would have been increased to 150,000 tons, with 10 percent increases annually over the remainder of the 15-year transition n NAFTA would have granted Mexico unlimited access for its exportable surplus sugar in years 7-15 whenever Mexico reached net exporter status during two consecutive years

THE SIDE-LETTER n The Executive Agreement eliminates the two-year unlimited access clause n The 250,000 ton access conceded in year seven is an absolute ceiling n Beginning in year seven, and for the remainder of the transition period for sugar, Mexico will be allowed to ship its net production surplus to the United States duty-free, up to a maximum of 250,000 tons

THE SIDE-LETTER n United States duty-free access to the Mexican market will, in turn, be determined by the United States net production surplus, also with a cap of 250,000 tons n The calculation of net production surplus for both countries will be carried out annually n Consumption of high fructose corn syrup is included with consumption of sugar for both countries

Duty-free Sugar Access Provisions of NAFTA

THE ENVIRONMENT n Increased capacity in the Mexican sugar industry n Expanded U.S. HFCS production capability

NAFTA SUGAR PROVISIONS DISPUTE n Interpretation of the content and validity of the side-letter agreement n Net Surplus Production Status n Under the amended agreement the net surplus is calculated as the sum of sugar and HFCS consumption minus the production of sugar

Mexican Net Surplus Production and Duty-Free Sugar Exportable

Duty-Free Mexican Sugar Exportable to the U.S., Alternate Policy Regimes

HFCS ISSUES n HFCS Import Duties: The Broomcorn Dispute n HFCS Import Duties: U.S. Dumping Allegations

IMPLICATIONS FOR THE FUTURE n One objective of a transition period was to gradually ease the Mexican and U.S. sugar industries into a state of free trade in sugar

IMPLICATIONS FOR THE FUTURE n One objective of a transition period was to gradually ease the Mexican and U.S. sugar industries into a state of free trade in sugar n While this objective is being achieved to some extent, the number of disputes and protests associated with the transition indicate that it is certainly not painless

IMPLICATIONS FOR THE FUTURE n One objective of a transition period was to gradually ease the Mexican and U.S. sugar industries into a state of free trade in sugar n While this objective is being achieved to some extent, the number of disputes and protests associated with the transition indicate that it is certainly not painless n Observers should not be surprised if these and other disputes related to sugar and agricultural-based sweeteners continue well past the transition period