Abstract
This study analyzes the effect of Mexico's sugar exports on the U.S. sugar industry, which could reach over 250,000 MTRV in 2006 and substantially increase in subsequent years by substituting sugar for HFCS in soft drink products. Mexico's additional sugar exports would cause a substantial reduction of U.S. sugar price. Because of low prices of sugar, production of beet and cane sugar in the United States is expected to fall. Under these circumstances, social welfare in the United States may increase; however, welfare benefits may go to food processors rather than consumer. By contrast, increases in sugar imports would substantially hurt sugar beet and cane producers.
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