The North American Free Trade Agreement (NAFTA) of 1995 was designed to abolish most of the trade barriers among the United States, Canada, and Mexico within a 15-year time period. In 2008, the last restrictions on Mexican sugar exports to the United States were eliminated, resulting in an open border for bilateral sugar trade. This was an historic event given that no other sugar-producing country had such unrestricted access to America's market. However, in 2014, American sugar growers launched a campaign to restore trade restrictions on sugar imports. They complained that Mexican sugar exports were being subsidized by Mexico's government and dumped into the U.S. market at artificially low prices, causing economic injury to American growers. The U.S. Department of Commerce and the U.S. International Trade Commission subsequently found that Mexican sugar growers were subsidized and dumped in a manner that threatened material injury to American growers. Therefore, punitive tariffs were placed against Mexican sugar entering the United States. The Commerce Department recommended antisubsidy tariffs on Mexican sugar of up to 17.01 percent, and antidumping tariffs ranging from 39.54 percent to 47.26 percent. What made this policy ironic was that the United States was as guilty as Mexico of subsidizing sugar growers.
Fearing that these tariffs might block access to America's sugar market, Mexico decided to minimize its losses by agreeing to reduce exports to America in exchange for the termination of the tariffs. The sugar agreement with the United States included restrictions on both the price and quantity of imports from Mexico. Sugar was allowed to be imported into the United States if it was priced above certain levels; for example, 20.75 cents per pound for raw sugar and 23.75 cents per pound for refined sugar. Also, quantity restrictions on imports were imposed, as were restrictions on the timing of import arrivals.
Who were the likely winners and losers from the sugar agreement? The U.S. sugar industry got what it desired in that both price and quantity were constrained in a manner that kept the American sugar market insulated from the world. Therefore, U.S. sugar growers could continue to realize high profits. As for Mexico, it got a portion of what it wanted. Although Mexican sugar growers no longer enjoyed the open access to the U.S. market that was negotiated under NAFTA, they dodged being completely shut out of their most important export market. Finally, anyone who purchased sugar in the United States paid a higher price than it was worth in the outside world. This included not only consumers but also producers that use sugar as an input, like bakers and soft drink companies. Indeed, they were not pleased about the U.S.-Mexico sugar agreement.

What do you think? Do you feel that the antidumping duties placed on Mexican sugar provided overall benefits to the United States?