The sugar markets of Mexico and the United States have been interlinked since the North American Free Trade Agreement (NAFTA) came into force in 1994, which initiated a 15-year phase‑out of duties and quotas that culminated in fully liberalised sugar trade between the two countries in 2008. Canada’s sugar market has remained peripheral in terms of the agreement’s impact on regional and extra-regional trade flows.
The region constitutes one of the world's principal areas of sugar production, preferential sugar trade and one of the highest zones of sweetener consumption. Sugar production capacity spans a modest beet-sugar industry in Canada, both beet and cane operations in the US, and a cane industry that operates in 15 states across Mexico serving as a key driver for rural economic development.
Previous ISO studies, most recently 2008’s (MECAS(08)16), anticipated a market dynamic in which Mexican sugar would freely flow into the US market, while the antidumping duties established in 1990 (discussed in MECAS(95)18) would keep US corn-based sweeteners out of the Mexican market. Two decades on, the reverse has materialised: corn-sweetener exports from the US to Mexico now move largely without constraint, whereas sugar flows in the opposite direction are capped under the suspension agreement of December 2014.
The current market within the USMCA has seen Mexico’s sugar consumption decline leading to world market exports, as US market access is limited by the inclusion of duty-paid US imports into the “US needs” calculation, ahead of access rights for its regional agreement partners. Furthermore, the flow of imports into Canada has remained paltry.
In addition to outlining current dynamics, this study examines current challenges and constraints facing each national industry, and reviews the forward-looking projections issued by national authorities. The aim of this part of the review is to ascertain the potential of and pathway to a future structure in the regional trade agreement which would benefit all the industries that operate within its framework.
Introduction 1 The USMCA Sugar Market 1.1 Production / Consumption Overview 1.2 US Sugar Production 1.3 Canada Sugar Production 1.4 Mexico Sugar Production 1.5 Regional Sugar Production 1.6 Regional Sugar Consumption 2 Sugar Imports into the USMCA Market 2.1 Sugar Imported into the US Market 2.2 Sugar Imported into the Canada Market 2.3 Sugar Imported into the Mexico Market 2.4 Mexican Imports of HFCS 3 The outlook for the USMCA market 3.1 The Short Term Issues 3.2 Medium / Long Term Challenges 4 Prospects 5 Conclusion