Mexico will eliminate a 20 percent soft-drink tax following a World Trade Organization ruling that it violated global trade rules, officials said Wednesday. On Monday, a WTO panel rejected an appeal by Mexico and supported U.S. claims that Mexico was in breach of international law in imposing a 20 percent tax on drinks that are sweetened with anything other than cane sugar grown in Mexico.
The government plans to ask Congress to lift the tax, which was imposed in 2002 by legislators to protect the Mexican sugar industry.
"We are working to resolve the tax matter," said Hugo Pérezcano, the director of legal counsel of commercial negotiations of the Economy Secretariat.
Mexico was a top market for U.S. high-fructose corn syrup before the tax was imposed in 2002. The tax made it too expensive to use the corn sweetener in soft drinks, and today the U.S. share of the market is about 6 percent of pretax levels, according to the U.S. trade office.
The dispute over sugar and corn sweetener has cost U.S. corn refiners US$944 million annually, according to the Washington-based Corn Refiners Association.
But Mexico has maintained the dispute over U.S. high-fructose corn syrup and Mexican sugar will only be entirely resolved when access to their respective markets is settled.
