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MEXICO: Repeal of 20% soft drinks tax looking closer

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Mexican government officials have said they intend to seek the repeal of a 20% tax on soft drinks containing US-produced high-fructose corn syrup, according to US Trade Representative Robert Zoellick. He also dismissed reports that Mexico might repeal the tax only partly and retain provisions aimed at the US.

The tax was imposed at the beginning of the year, since when aides to President Vicente Fox have indicated their opposition to the tax. As was the intention, the tax has encouraged domestic Mexican soft-drink companies to use sugar rather than corn syrup as a sweetener, thereby bolstering domestic sugar suppliers suffering from over-production.

"The Fox administration opposes this (tax) and wants to get it reversed," Zoellick told the Senate Finance Committee during testimony on a range of trade issues. Zoellick said he had met with Mexican Economy Minister, Luis Ernesto Derbez, with a view to finding an administrative way to nullify the tax. "I talked with him as recently as this past weekend, and he gave me a sense they would be trying to do so in the near future."


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