Q: How is Mexico’s tax on high fructose corn syrup hurting Iowa corn growers?
A: Mexico launched a protectionist 20 percent sales tax and 20 percent distribution tax on beverages that do not use cane sugar in January 2002. It’s no coincidence that the stiff import tariff virtually shut out high fructose corn syrup sales from the U.S. By design, the tax makes corn syrup too expensive for beverage makers to use in Mexican soft drinks. And that negatively impacts corn growers in Iowa. In an effort to sweeten profits for its domestic sugar cane industry, Mexican lawmakers ignored the international trade obligations of Mexico. Those rules say Mexico must apply taxes "on comparable domestic and imported products in a nondiscriminatory manner." As chairman of the Senate Finance Committee, I have led the call in Washington to get this issue resolved through whatever means it takes. I’m pleased the Bush administration is pursuing a remedy through the World Trade Organization. In the meantime, I’ll continue pursuing my legislative proposal to impose a retaliatory tariff on Mexican tequila and other south of the border farm products.
Q: What other trade issues with Mexico are you working to resolve?
A: Last September I held a congressional hearing in my Finance Committee to examine other Mexican barriers erected to keep out American farm products. At the hearing, witnesses detailed Mexico's ongoing failure to comply with its obligations under the North American Free Trade Agreement (NAFTA) and the Agreements of the World Trade Organization (WTO). U.S. producers of pork, corn, beef, high fructose corn syrup (HFCS), rice and apples are experiencing hardship due to Mexico's disputed trade policies. Iowa farmers depend on exports to earn a living. They deserve to fully benefit from international trade agreements. That’s why I’m leading the charge to help Mexico achieve full compliance under its trade agreements. A number of trade issues with Mexico directly impacts Iowa jobs and the earning potential of Iowa farmers and workers, including its tax on high fructose corn syrup; its antidumping investigation on U.S. pork; and, its antidumping order on U.S. beef. Hopefully, the tariffs of up to 80 percent on U.S. beef that Mexico imposed four years ago at long last may be lifted. A trade panel in March gave Mexico 90 days to reconsider the tax because it said the Mexican government did not show domestic businesses were hurt by American beef imports. Mexico is an important trading partner with the United States. Our people share long-held cultural, political, social and economic ties with one another. I’m working to make it an even stronger partnership for generations to come.