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UPDATE 3-U.S. regulators vote to investigate sugar imports from Mexico

(Adds comment from the Mexican government; paragraphs 6-7)

WASHINGTON, May 9 (Reuters) - U.S. trade regulators ruled on Friday in favor of investigating allegations that Mexico is dumping cheap sugar in the United States, taking Washington closer to imposing penalties on sweetener imports.

In a preliminary vote, U.S. International Trade Commission officials found that imports of sugar from Mexico could injure local sugar growers.

Five commissioners voted in favor of probing accusations filed by the domestic sugar industry at the end of March that sweetener is being sold into the United States below fair value. The sixth declined to vote.

As a result, the Commerce Department will continue to assess potential anti-dumping and countervailing duties, with a preliminary decision expected next month.

"The ITC made the right decision today and validated our complaints," a spokesman for the American Sugar Alliance said in a statement.

In a statement, Mexico's Economy Ministry acknowledged the U.S. probe and said it would offer legal and technical assistance to Mexican sugar producers.

"The government of Mexico reinforces its determination to support and defend Mexican producers during this process, which it considers improper and without basis," said the statement.

At a hearing on the matter last month, U.S. sugar producers said cheap imports caused nearly $1 billion in damages in the local market.

Friday's vote will heighten tensions after the U.S. sugar industry accused Mexican mills in late March of dumping subsidized sugar across the border. 1/2ID:nL1N0MP0SI 3/8

Responding to the vote, the U.S. Sweetener Users Association, which represents food manufacturers, said it will continue to fight the charges, which are without "merit."

"Given the low threshold for determining injury in the USITC's preliminary determination, we are not surprised by today's ruling," the association said in a statement.

(Reporting by Chris Prentice in Washington and Gabriel Stargardter in Mexico City; Writing by Josephine Mason; Editing by Bernadette Baum, Tom Brown and Mohammad Zargham)