The Daily Update - NAFTA / Sugar / UK elections

The U.S. and Mexico look to have averted a trade crisis with a preliminary agreement earlier this week that staves off import tariffs (as high as 80%) on Mexican sugar. Although the deal looks to clear the way of a contentious issue between the two governments before the upcoming NAFTA talks, it may provide confidence that those talks will find some middle ground on a range of issues.

With NAFTA coming into effect in 1994, America’s sugar producers were protected from Mexican imports through small yearly quotas. However, in 2006 both sides signed a memorandum of understanding to establish free trade on sweeteners within 24 months. However with years of record harvest in both Mexico and the US there were calls in early 2014 from the US sugar producers to instigate anti-subsidy and anti-dumping tariffs on Mexican imports. The two sides later that year reached an agreement on restrictions to Mexican sugar imports in exchange for dropping the investigations into the dumping policies.

Commerce Secretary Wilbur Ross seemed pleased with the outcome stating that ‘The Mexican side has agreed to nearly every request by the U.S. industry to address flaws in the current system and to ensure fair treatment of American sugar growers’. Although the draft agreement still does need some fine tuning according to U.S. sugar producers who claim in its current form the agreement leaves open a loophole that would allow Mexican exports to continue to dump subsidised sugar on the U.S. market. American Sugar Alliance spokesman Phillip Hayes said ‘We will work with Secretary Ross in the coming days to see if that loophole can be effectively closed so that the basic provisions of the agreement are not undermined and USDA can effectively manage the sugar program’. When Ross was pressed on how long it may take to get the U.S. sugar industry on board he was hopeful ‘It should be days, not weeks or months’ to get a final draft signed off.

And of course we have the UK election today where it has been pointed out that the UK could return to a two-party state. The combined polling of the Conservatives and Labour is around 80%. In the last 3 elections the highest combined total of the two major parties was below 70%, and the last 11 elections only once (1979, when Margaret Thatcher beat James Callaghan with a parliamentary majority of 43 seats) when it was just shy of 81%. This trend is the opposite of what has been seen in most of the developed world; however the UK has maybe addressed anti-establishment politics earlier than other countries with the Brexit vote. UKIP had been calling for the vote for years and the movement for a democratic vote on our relationship with Europe was growing almost daily. However now we have had the vote, the people have spoken, UKIP now no longer really serves a purpose, one of the main reasons we could potentially return to a two- party state, and the fact that the Liberal Democrat Party want a second vote on the Brexit deal. However it seems that a large part of the UK population has accepted the Brexit vote and are keen on moving on. And the outcome?? Well the polls have varied massively but none has a Labour victory, and Sporting Index is making 75–87 (at time of writing) on the size of the Conservatives seat majority.