Sugar deal is good for Iowa

In an unexpected turn of events, U.S. and Mexican sugar producers reached an agreement to end the sugar dispute and avert an all-out trade war. The U.S. Department of Commerce is expected to finalize the agreement very soon, which is very good news for Iowa. Since 2008, the U.S. has allowed duty-free sugar to be imported from Mexico, and Mexico allowed duty-free corn syrup from the United States, as part of the North American Free Trade Agreement.

Earlier this year, however, U.S. sugar producers filed an anti-dumping complaint against Mexico and set into motion a series of events that put economic and diplomatic relations between the two countries, as well as the livelihood of Iowa's corn growers and refiners, at risk. that's because it is very likely Mexico would respond to high tariffs on sugar imported to the U.S. with high tariffs on U.S. high-fructose corn syrup exported to Mexico. (Notably, shipments of corn syrup have increased tenfold since NAFTA went into effect.)

HFCS is important to our state. Specifically, the HFCS industry provides 2,600 jobs, with potential for more jobs to be created; $170 million in salaries from these high-paying jobs; and $1.9 billion worth of value added to the 163 million bushels of Iowa corn used to make HFCS.

The sugar spat put much at risk in our state - but it seems cooler heads have prevailed as the U.S. and Mexican governments have reached an agreement (the official term is a 'settlement agreement”) to end two investigations - one claiming subsidies, the other claiming dumping - that threatened to provoke a full-fledged trade war.

Per the agreement, the U.S. government agreed not to place duties on Mexican exports in return for restrictions on the price and quantity of Mexican sugar brought to the United States.

The agreement is in the best interest of both countries involved and is far less destructive to the U.S.-Mexican relationship than dumping actions. Fortunately for Iowans, it also ensures that HFCS does not get pulled into the fray.

The governments should be commended for their commitment to the negotiation process. After all, the two countries are NAFTA partners, and this negotiation is precisely the approach to trade disputes encouraged by the agreement - as opposed to dumping actions that are intended to be sought only as a last result, if such negotiations are unsuccessful.

Thanks to their actions, we are on the right path. The Department of Commerce is reviewing comments on its draft and is expected to finalize the agreement as soon as this week.

I look forward to seeing that happen.

' Craig Lang is a dairy farmer and president of the Prairie Strategy Group. Comments: craig@prairiestrategygroup.com