In Pacific trade deal, Australia gets bigger U.S. sugar allocation

Australia's Trade Minister Andrew Robb attends the meetings for the Trans-Pacific Partnership (TPP) in Lahaina, Maui, Hawaii July 28, 2015. REUTERS/Marco Garcia

ATLANTA (Reuters) - Australia, the world’s third-largest exporter of raw sugar, will be allowed to export an additional 65,000 tonnes of sugar per year to the Unites States under the Trans-Pacific Partnership deal agreed on Monday, an Australian official said.

That’s on top of the 87,402 tonnes of sugar allotted to Australia under the tariff rate quota for the marketing year that started on Oct 1.

The country could send some 400,000 tonnes of sugar to the United States every year by 2019 in the best case scenario, the official who is familiar with the talks said.

Under the terms of the deal, Australia will also get 23 percent of the discretionary quota, which is based on U.S. demand under the TRQ, the official said. That’s up from 8 percent now.

The deal comes just two months after Australia rejected a U.S. offer to permit an extra 62,000 tonnes per year under the Trans-Pacific Partnership as the country pushed for a bigger guaranteed slice of the lucrative U.S. market.

Australia had been demanding access to 500,000 tonnes, but said it was seeking a mechanism to ensure it could tap future growth in U.S. sugar demand.

U.S. sugar growers had warned about the economic damage to the domestic industry from greater imports of sweetener and Mexico has been keen to protect preferential access to the U.S. sugar market.

The TPP, which would cover around 40 percent of global output, involves Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam.

Reporting by Krista Hughes; Writing by Josephine Mason in New York; Editing by Chizu Nomiyama and Meredith Mazzilli