NAFTA AGRICULTURE FACT SHEET:
Sugar-Containing Products

TREATMENT OF TARIFFS:

• U.S. tariffs on sugar-containing products are being phased out in conjunction with the treatment of quantitative restrictions.
• Mexican tariffs on comparable sugar-containing products range from 10 to 20 percent and are being phased out over 10 years.

TREATMENT OF QUANTITATIVE RESTRICTIONS:

• Upon enactment of the NAFTA on January 1, 1994, previously existing U.S. Section 22 import quotas on Mexican sugar-containing products were replaced by a NAFTA tariff-rate quota (TRQ), which is being phased out over a 10-year transition period.
• Mexico initially received three aggregate TRQ’s that covered a basket of products: 1) 1,500 metric tons for blended syrups; 2) 1,500 metric tons for articles greater than 65 percent sugar; and 3) 12,791 metric tons for articles greater than 10 percent sugar. These initial TRQ's were based on previous U.S. global quotas and grow by a 3-percent compound annual rate over the transition period.
• In-quota shipments enter the United States duty-free. Above-quota imports from Mexico will face a tariff equivalent ranging from 91.2 to 120.3 percent, depending on the product. The specific tariff ranges from $243 to $435 per ton. The over-quota tariffs are being phased out over 10 years.
• Mexico does not have any quantitative restrictions affecting trade in sugar-containing products.

RULES OF ORIGIN:

• Sugar confectionery that is made with imported sugar qualifies for NAFTA preference.
• For cocoa, 100-percent non-NAFTA cocoa beans, paste, butter, and unsweetened powder may be used to make bulk chocolate and chocolate candy for retail sale.
• For NAFTA trade in sweetened cocoa powder containing less than 90 percent sugar, 65 percent of the cocoa and 65 percent of the sugar must be North American in origin.
• For U.S.-Mexico trade in sugar-containing products under tariff lines 1806.10 and 2106.90 containing 90 percent or more sugar, including sweetened cocoa powder, the product must be made from either U.S. or Mexican sugar to receive NAFTA preference.

  U.S. Sugar-Containing Products Trade with Mexico

  Calendar Year	1990	1991	1992	1993	1994	1995	1996
  Export Value	58,262	73,899	87,769	96,744	112,983	83,746	137,772
  Export Volume	34,258	43,374	69,190	119,027	142,228	117,288	302,008
  Import Value	37,928	38,867	45,930	51,225	64,072	83,077	107,101
  Import Volume	63,727	143,136	92,565	64,481	113,778	134,728	209,601

Value in $1,000; volume in metric tons. Coverage includes tariff lines from Chapter 17 and Chapter 18 and includes more products than are covered by the three TRQ’s.

Last modified: Friday, November 18, 2005