Canadian Sugar Industry Welcomes Entry Into Force of the CUSMA

Canada’s sugar industry welcomes the entry into force of the Canada-US-Mexico Agreement (CUSMA) – also known as the “USMCA” in the United States and the “T-MEC” in Mexico.

The United States is by far Canada’s largest trading partner, and the new agreement will preserve integrated cross-border supply chains serving food and beverage industries in which Canadian sugar is an essential and competitive ingredient.

The agreement continues long-standing trade provisions established under the NAFTA, while also providing important new US market access for Canadian sugar and sugar-containing products restricted by US import quotas.

The new US market access improvements for Canada include:

• An annual quota of 9,600 tonnes of refined sugar (processed in Alberta from Canadian sugar beets produced in Alberta);
• An annual quota of 9,600 tonnes of sugar-containing products (made in Canada using beet sugar or cane sugar “refined in Canada”); and
• Increased refined sugar quota access in any year that the United States permits additional global quota access beyond its WTO commitments. When this happens, Canada’s CUSMA quota will increase by an amount equivalent to 20% of the additional global quota. Refined sugar supplied under the increased quantity of the CUSMA quota can be made from Canadian beet sugar or from cane sugar refined in Canada from non-originating raw sugar.

The increased CUSMA quota access for Canadian refined sugar was triggered for calendar year 2020 as a result of the US announcement on April 3, 2020 of an additional 181,437 tonnes of global quota. Accordingly, the US Trade Representative gave notice on July 1, 2020 that the CUSMA quota for imports of Canadian refined sugar had been increased by an additional 36,287 metric tonnes, raw value (MTRV) for calendar year 2020.

The US Sweetener Users Association (SUA) applauded the USMCA entry into force and the support it brings for US sugar-using companies when there is a US need for additional refined sugar, providing the following statements:

“American sugar-using companies continue to face a tight domestic sugar supply situation; this new trade agreement will help ease market pressure by allowing the United States to import additional refined sugar from Canada beginning today.

“This means that U.S. food and beverage manufacturers will now have greater access to genuine, high-polarity, refined sugar. Since raw sugar, which must go through a refinery prior to use, has filled the majority of the latest U.S. tariff-rate quota increase, SUA is grateful that its members now have additional access to ready-to-use sugar.”

Equally important to these new quota opportunities are Canada’s export administration procedures to ensure equitable sharing among historical Canadian producers of these products. Interim export administration procedures have been developed for the first partial quota year (July 1 through December 31, 2020). This includes the requirement for Canadian export permits linked to Canadian production of eligible sugar and sugar-containing products.

The industry looks forward to ongoing cooperation with Canadian authorities in the development of formal allocation policies (which are expected to be in place by January 1, 2021, for the start of the next quota year).

For further information, contact:
Sandra Marsden, President, Canadian Sugar Institute
smarsden@sugar.ca