May 2, 2017 / 12:00 AM / 4 months ago

UPDATE 5-U.S. Commerce chief extends Mexico sugar deadline, sees impasse

(Adds late Monday statement from U.S. Commerce Secretary)

MEXICO CITY/WASHINGTON, May 2 (Reuters) - The Mexican and U.S. governments have agreed to extend the deadline for negotiations over a sugar trade agreement to June 5, with U.S. Commerce Secretary Wilbur Ross saying late Monday the talks were "at an impasse."

In a statement, Ross said the Commerce Department notified Mexico's government that the United States intended to resume collection of anti-dumping and anti-subsidy duties on sugar imports starting June 5 unless an agreement is reached.

"While I regret that such measures were needed, it is my hope that Mexico and the United States can reach a fair agreement before June," Ross said.

The orders were suspended, pending negotiations as a May 1 deadline passed.

Mexico's economy ministry, the country's top trade authority, weighed in late Monday with a statement that put the blame for the impasse squarely on the U.S. side.

"Excessive demands from U.S. producers and refiners have impeded the ability to reach a solution," the ministry said, adding that U.S. negotiators continued to press for limits on Mexican raw sugar exports for U.S. refiners as well as ending "all competition" from Mexican refined sugar in the U.S. market.

The ministry said however it remained open to reaching a negotiated agreement.

The U.S. sugar industry pressed the Commerce Department late last year to withdraw from a 2014 trade agreement that sets prices and quota for U.S. imports of Mexican sugar unless the deal could be renegotiated.

A letter on Monday was sent by Ronald Lorentzen, acting assistant secretary for enforcement and compliance with the Commerce Department, to Juan Cortina Gallardo, president of Mexico's sugar chamber.

"... Despite everyone's best efforts and numerous meetings, there remain outstanding issues between the parties," Lorentzen wrote, adding that the agreement will be terminated if a new one cannot be reached by June 5.

A termination would result in large anti-dumping tariffs being slapped on sugar imports from Mexico.

The latest twist in the sugar trade dispute between Mexico and the United States comes as ties between the two nations have frayed under U.S. President Donald Trump, who took office in January. Trump wants to revise the North American Free Trade Agreement with Mexico and Canada to better serve U.S. workers and companies.

Mexico is the top foreign supplier of sugar to the United States, a coveted market of 12 million tons where the U.S. government gives export quotas to about 40 sugar-producing countries each year through trade programs.

Mexico is due to ship about one-third of U.S. imported supplies this year. (Reporting by Adriana Barrera and David Alire Garcia in Mexico City; Additional reporting by David Lawder in Washington and Chris Prentice in New York; Editing by Leslie Adler and Jeffrey Benkoe)

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