12 



QUESTIONS FOR THE RECORD 



FROM HONORABLE BILL BARRETT 



TO AMBASSADOR KANTOR 



Ambassador Kantor, under the current sugar provisions, both 

 Mexico and the United States would adopt TRQ's (Tariff Rate 

 Quotas) so that all restrictions on sugar trade would be 

 eliminated by the end of a 15 year transition period. In the 

 first six years of the agreement, Mexico's sugar exports would be 

 limited to its current quota allocation of 7,258 metric tons. If 

 Mexico attains net exporter status during this six year period, 

 it would be allowed to export its net surplus up to a total of 

 25,000 tons. From year seven to fifteen, Mexico would be allowed 

 to export up to 150,000 metric tons of it net export surplus to 

 the US. 



1. Q. Mr. Kantor, under this provision, would Mexico need only 

 be projected to be a "surplus producer" of sugar for two 

 consecutive years to be able to send the U.S. its entire surplus 

 of sugar after the sixth year of the agreement? 



A. The projection would only apply to the upcoming crop year. 

 As in the case of most USDA program crops, we are interested in 

 production and trade of the upcoming crop. The administration of 

 the U.S. sugar program is based on projections of the U.S. and 

 world sugar situation. Under NAFTA, we will simply include 

 projections for the sugar supply and use situation in Mexico. 



Any errors in U.S. or Mexican sugar projections will be 

 corrected. As provided for in the agreement, each year the net 

 surplus producer estimate will be adjusted for the previous 

 year's under- or over-estimate. 



2. Q. Mr. Ambassador, if Mexico is a net importer of sugar and 

 its producers are higher cost and more subsidized than U.S. 

 producers why are we providing Mexico virtually unlimited access 

 to the U.S. market after 6 years? 



A. Both Mexico and the United States are net importers of sugar 

 and are expected to maintain that status for the foreseeable 

 future. Mexico is a higher cost producer, but Mexican producers 

 are not more heavily subsidized than their U.S. counterparts. 



In the NAFTA, the U.S. and Mexico have committed to a complete 

 elimination of all agricultural trade barriers — tariff as well 

 as non-tariff — for all commodities. There are no exceptions. 

 The sugar provisions of the NAFTA are unique within the Agreement 

 and unusually tough because access for sugar is tied to the 

 ability of each nation to become a net surplus producer of sugar. 

 Mexico can only reach net surplus producer status with 

 substantial investment and time. Given its growing population 



