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 Business News | May 2006 
Fox Asks Congress to Eliminate Soft-Drink Tax to Abide by WTO Ruling
 Associated Press
Mexico City – Mexican President Vicente Fox has asked Congress to eliminate a 20 percent tax on corn syrup sweetened soft drinks to abide with a World Trade Organization ruling.
In a presidential decree issued Tuesday, Fox urged legislators to act quickly to avoid U.S. trade reprisals against Mexico.
The Mexican Congress Permanent Commission, which handles matters while the legislature as a whole is on break, turned the request over to the lower house for analysis.
In March, a WTO panel rejected an appeal by Mexico and supported U.S. claims that Mexico was violating international law in imposing a 20 percent tax on drinks that are sweetened with anything other than cane sugar grown in Mexico.
Mexico was a top market for U.S. high-fructose corn syrup before the tax was imposed in 2002. The tax made it too expensive to use the corn sweetener in soft drinks, and today, the U.S. share of the market is about 6 percent of pretax levels, according to the U.S. trade representative's office.
The dispute over sugar and corn sweetener has cost U.S. corn refiners $944 million annually, according to the Washington-based Corn Refiners Association.
Mexico has maintained that the dispute over U.S. high-fructose corn syrup and Mexican sugar will only be entirely resolved when access to their respective markets is settled.
Last year, the United States raised its duty-free sugar quota for Mexico by 275,577 tons. Mexico reciprocated with a similar quota for U.S. high-fructose corn syrup.
But the Mexican government says it wants the United States to open its markets to Mexican sugar even further, as part of the North American Free Trade Agreement. |
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