Corn Sweetener Tax

March 5, 2002

We've spent a lot of time and energy on trade disputes with Europe, including hormone beef and biotech crops. But we have a big problem now much closer to home.

On January 1 the Mexican government imposed a 20% tax on corn sweetener used in soft drinks. Mexico is our third largest agricultural export market and expected to surpass Canada in a couple of years. The Mexican action is costing u.S. corn farmers in two ways. Corn that is exported to Mexico to be processed into com sweetener and com that is processed in the U.S. into sweetener before being sent to Mexico. That market is dead.

It is like a blatant violation of the WTO trade rules. The tax is clearly discriminatory. The Mexican government wants to get our attention and they have. They want some action to open the

U.S. market to their surplus sugar. The fight is sugar versus corn sweetener.

The Mexicans do have a point. If we expect them to use our com sweetener, we need to provide more access to their sugar into our market. All together we export 7.4 billion dollars of farm products to Mexico and we buy 5.1 billion from them.

The Bush Administration needs to hammer out this dispute before the American farmer loses any more. Senator Grassley of Iowa said it best in a speech on the Senate floor. "Mr. President, this is just the sort of 'beggar thy neighbor' trade policy of the past that we have worked so hard to overcome."

Now I say, wouldn't it be a good idea for Mexico to take their surplus sugar and convert it into ethanol? Sugar surplus problem solved! A number of American businesses and political leaders have suggested just a common sense solution.

Let's get his problem fixed. Until next week, I am John Block from Washington.