Iowa Public Television


Mexico Overturns Fructose Tax

posted on December 8, 2006

The Mexican government is planning changes in a special soft-drink sales tax to eliminate discrimination against beverages made with high-fructose corn syrup.

The 2007 budget proposal sent to Congress this week calls for the tax to be lowered to 5 percent from 20 percent, and charged on all soft drinks.

The so-called "fructose tax" was imposed by the Congress in 2002 amid a long-standing dispute between Mexico and the United States over sweeteners, and initially applied only to drinks made with sweeteners other than cane sugar.

The dispute involved a number of measures taken by Mexico against imports of U.S. high-fructose corn syrup to protect its sugar industry and to press that the U.S. grant Mexico greater sugar import quotas under the North American Free Trade Agreement.

The U.S. complained about the fructose tax to the World Trade Organization, which ruled against Mexico. Several Mexican beverage makers also had taken court action against the tax.

Tags: corn Mexico news trade