Mexican Congress ends 20% tax on beverage corn syrup

Mexican Congress ends 20% tax on beverage corn syrup The Mexican Congress has eliminated a controversial 20 percent tax on soft drinks sweetened by imported high fructose corn syrup.
   Mexico’s lower House of Deputies voted earlier this month to implement a 5 percent tax on all soft drink sales in Mexico regardless of their sweetener content. The Mexican Senate responded by reducing the tax to zero, which both chambers adopted on Dec. 21.
   The 20 percent tax, enacted by the Mexican Congress in January 2002, shut off U.S. sales of high fructose corn syrup to Mexico for more than four years. According to the Washington-based Corn Refiners Association, this tax cost the industry $944 million in lost sales.
   The World Trade Organization issued a final ruling on the high fructose corn syrup case in favor of the United States on Oct. 7, 2005, that was later appealed by the Mexican government. On March 6, the WTO Appellate Body upheld the decisions of the final WTO panel report and sided with the United States on all counts.
   “The corn refining industry applauds the Mexican legislature for lifting the tax on U.S. high fructose corn syrup sales in Mexico,” said Audrae Erickson, president of the Corn Refiners Association, in a statement. “This action will yield positive results for sweetener industries on both sides of the border.”
   The price per bushel of corn in the United States could rise by 10 cents in the major corn growing states, or 6 cents nationally, when the Mexican market is fully restored for corn sweeteners in line with the North American Free Trade Agreement, the trade group said.