Goodlatte Applauds USTR for Requesting a WTO Dispute Settlement Panel on Mexico's Discriminatory Taxes

Jun 22, 2004

WASHINGTON, D.C.- Congressman Bob Goodlatte, Chairman of the House Agriculture Committee, today praised United States Trade Representative Robert Zoellick for formally requesting that that the World Trade Organization (WTO) establish a dispute settlement panel (DSP) regarding Mexico's 20 percent sales tax and 20 percent distribution tax on sweetened beverages that contain high fructose corn syrup.

The United States made its request for the establishment of a WTO panel at today's meeting of the WTO Dispute Settlement Body in Geneva, Switzerland .

"I am glad to see this process moving forward," Goodlatte said. "This is an appropriate action and in the best interest of U.S. agriculture."

"I am a strong supporter of free and fair trade and agree with President Bush that we must open new mark ets for our nation's farmers and ranchers," Goodlatte continued. "But in moving forward with future trade agreements we must not neglect to enforce existing agreements. Mexico 's beverage taxes are inconsistent with their obligations in the WTO."

In October of 2003, Goodlatte sent a letter to Zoellick urging that if Mexico continued to be unwilling to address the issue, it should be met with a strong counter response from the U.S. , including retaliation if necessary.

Only beverages that use high fructose corn syrup (HFCS) or any other sweetener other than cane sugar are subject to the beverage taxes. These taxes have dramatically restricted U.S. exports of HFCS. For every 2 million metric tons of HFCS access into Mexico , the U.S. corn industry has lost $620 million annual HFCS export sales and more than $300 million annual corn sales.

In 1998, Mexico imposed anti-dumping duties on imported U.S. HFCS. The U.S. challenged these anti-dumping duties in the WTO and won the case. In 2001, the WTO adopted the findings of a dispute settlement panel and the Appellate Body that Mexico 's anti-dumping duties were inconsistent with the WTO Antidumping Agreement. Soon thereafter, in January 2002, Mexico imposed a 20 percent tax on soft drinks and other beverages that use any sweetener other than cane sugar.

###