For the first time ever, an agreement to suspend antidumping and countervailing duty (“AD/CVD”) investigations (“suspension agreement”) has been challenged by domestic parties in petitions filed with the U.S. International Trade Commission (“ITC”).  On December 19, 2014, the U.S. Department of Commerce (“Commerce”), the Government of Mexico, and Mexican sugar exporters accounting for substantially all exports to the United States signed agreements suspending the AD/CVD investigations on sugar from Mexico.  The suspension agreements set price floors and volume restrictions on Mexican sugar imports entering the United States.  On January 8, 2015, two U.S. sugar refiners petitioned the ITC to investigate whether the suspension agreements “eliminate completely” any injury to the domestic sugar industry caused by Mexican imports.  Pursuant to a never-before-used subsection of the  Trade Agreements Act of 1979, the two U.S. sugar refiners claim that the terms of the suspension agreements will lead to Mexico shipping less raw sugar, and more refined sugar, to the United States, thereby reducing the U.S. refiners’ supply and increasing competition for their finished product (refined sugar).  Separately, the same two U.S. refiners requested that both Commerce and the ITC continue their investigations on Mexican sugar.

On January 21, 2015, the ITC instituted reviews of the suspension agreements, which will include two opportunities for interested parties to file written submissions (the first of which is due by February 10, 2015) and an opportunity for an oral presentation at proceeding to be held at the ITC on February 19, 2015.   In its notice of institution, the ITC stated that is particularly interested in receiving parties’ views concerning the following issues:

  • What information the ITC should use to assess whether the suspension agreements eliminate completely the injurious effect of the subject imports.
  • The time period the ITC should evaluate in assessing whether the suspension agreements eliminate completely the injurious effect of the subject imports.
  • The standard the ITC should use to assess whether the injurious effect of the subject imports is “eliminated completely.”
  •  The use of the singular word “effect” in the statute and whether the ITC is permitted or required to assess any “effect” other than that resulting from pricing of subject imports under the suspension agreements.
  • Whether the ITC’s analysis of “injurious effect” incorporates any analysis of injurious effect of subject imports caused by the suspension agreement itself.

The ITC must complete its analysis of whether the suspension agreements “eliminate completely” injury to the domestic industry by late March.  If the ITC determines that the suspension agreements fail to eliminate completely the injury caused by Mexican sugar imports, then the ITC and Commerce will resume their investigations.  If the existing suspension agreements are found not to satisfy the statutory requirement, Commerce could negotiate new suspension agreements prior to issuing its final determinations.