U.S. fights Mexican corn syrup import tax in WTO

U.S. fights Mexican corn syrup import tax in WTO    Mexico’s 20 percent tax on imports of corn syrup used in soft drinks has resulted in a sticky battle that the U.S. government hopes to win in the World Trade Organization.
   The Office of the U.S. Trade Representative Tuesday requested the WTO establish a dispute settlement panel regarding Mexico’s corn syrup import tax. The United States believes the tax violates Mexico’s WTO obligations because it discriminates against U.S. high-fructose corn syrup, a sweetener that directly competes with sugar in many applications.
   “Mexico’s discriminatory beverage tax is the latest in a series of measures imposed to protect Mexican sugar producers from competition,” said U.S. trade representative Robert Zoellick in a statement. “Our sweetener industries have tried hard to resolve this matter. However, it is now time to go to the WTO to ensure the rights of American corn refiners are respected.”
   In the 1990s, the U.S. corn refining industry started exporting large amounts of corn syrup to Mexican soft drink bottlers as a substitute for sugar. The U.S. industry even opened two plants in Mexico to produce this corn syrup from imported U.S. corn.
   In 1998, Mexico imposed antidumping duties on imported U.S. high-fructose corn syrup. The United States challenged Mexico’s antidumping duties in the WTO and won. The WTO ruled that Mexico’s antidumping duties were inconsistent with the WTO Antidumping Agreement.
   In January 2002, Mexico imposed a 20-percent tax on soft drinks and other beverages made with sweeteners other than cane sugar.
   According to the USTR, in 1997, the year before the antidumping duties were imposed, U.S. exports of high-fructose corn syrup to Mexico were 193,519 metric tons, commercial basis, valued at $63 million. In 2003, U.S. exports were 4,111 metric tons, commercial basis, and valued at $1.5 million.
   Sen. Charles E. Grassley, R-Iowa, chairman of the Senate Finance Committee, supports retaliatory trade measures against Mexico if the country does not back down from its tax on high-fructose corn syrup imports.