WTO Appellate Body Upholds Final Ruling on HFCS Tax, NCGA Notes (5-18-06)

The National Corn Growers Association (NCGA) today welcomed the ruling by the WTO Appellate Body in favor of the United States regarding the violation of Mexico’s tax on beverages containing high fructose corn syrup (HFCS).

“This ruling will hopefully resolve the long-standing sweetener trade dispute with Mexico regarding HFCS,” said Leon Corzine, NCGA chairman. “HFCS is a major market for U.S. corn, consuming more than 5 percent of the national corn crop in 2005. NCGA supports efforts to protect and expand those markets through free and fair trade.”

According to the Corn Refiners Association, the 20 percent tax, enacted by the Mexican Congress in January 2002, has shut down U.S.-owned sales of HFCS to Mexico for more than four years. Losses of $944 million in HFCS sales, equivalent to 168 million bushels of corn, are sustained every year that the tax was in place, with additional sizable losses to investments. The price per bushel of corn in the United States could rise by $0.10 in key corn states, or $0.06 nationally, when the Mexican market is fully restored for corn sweeteners.

The WTO issued a final ruling on the HFCS case in favor of the United States on Oct. 7, 2005, that was later appealed by the Mexican government. The WTO Appellate Body ruling announced today upheld the decisions of the final WTO panel report and sided with the United States on all counts.