US sugar industry efforts to influence US positions on free trade agreements

U.S. Sugar Industry Efforts to Influence U.S. Positions on Free Trade Agreements

John Forrer
Diana Tussie
Marisa Diaz-Henderson
Patrick Funicello
Kristen Jancuk

George Washington University Center for the Study of Globalization

August 11, 2005 - 90 pp

Executive summary

Sugar as a commodity has had a long, nearly uninterrupted, run of protection in many countries,
especially the United States, Japan and the European Union. Initially protected in the United States
and Europe as an infant industry, sugar beet production had outstripped sugarcane production by
the outset of the 20th century in many countries. The sugar industry has been successful at
convincing successive U.S. governments to continue a variety of price support strategies in an effort
to limit the import of more cheaply produced cane sugar, which, for the most part, comes from
developing countries. Relative to other traditionally protected commodities, such as steel, cotton,
peanuts, and textiles, in stating its case on Capitol Hill and in the media, sugar seems to be one step
ahead of both lobbyists for other agricultural commodities and proponents of trade liberalization,
targeting sympathetic politicians and winning exclusions, side agreements, and loopholes in a string
of ostensibly comprehensive free trade agreements.

This report documents the historical trajectory and current activities of the sugar industry as CAFTA
trade negotiations proceed on Capitol Hill and are covered in the media. Drawing from examples of
recent trade agreements such as NAFTA and the U.S.-Australia Free Trade Agreement, it identifies
some of the patterns and reveals the strategies of arguments that have been employed by members
of the sugar industry lobby, assesses these strategies based on their relative successes or failures, and
suggests what level of tolerance might exist in the near future vis-à-vis the continued acceptance of
the exclusion of sugar from trade agreements. This report describes efforts by the U.S. sugar
industry to influence U.S. policy on Free Trade Agreements (FTAs) in the last 5-10 years, including
tracking money spent on lobbying, identifying and summarizing papers and studies by the industry
to support its position, and providing a description of the industry’s connections to policymakers.

After a summary of the history of the U.S. industry and a report on its current structure and the
lobbying activities of its members, this paper includes a detailed description of the global structure
of the sugar industry in an effort to clarify the motivation behind U.S. sugar’s claims of global
market distortion and provide additional information about what drives global sugar prices and trade
flows. This report concludes with an epilogue that covers aspects of the recent passage of CAFTA
by the U.S. Senate and House of Representatives in an extremely close vote in an attempt to identify
any relationships between the targeting of sugar industry donations and how certain individuals

Based on this history and description of the current structure of the global sugar industry and the
focus on its U.S. structure and lobbying patterns, an informed prediction about future lobbying
successes and failures can be made with regard to U.S. sugar and trade agreements. In the run-up to
the Congressional votes following President Bush’s signing of the CAFTA agreement, it was
consistently reported that there was insufficient support for the CAFTA-DR in the U.S. Congress
up until the days preceding the actual vote, and sugar was often held up as the major obstacle to its
passage and-by extension-passage of the FTAA and future FTAs. The concessions promised to
sugar producers to soften the potentially negative impact of increased sugar imports under CAFTADR,
though interpreted by some as yet another encouraging victory for the sugar lobby, have already
been met with greater resistance than in negotiations for other trade agreements from a
countervailing lobby composed of sugar-using industries, government watchdog groups who track
spending activities, and environmental activists. For this reason, sugar, which was at least partially
successful in its attempt to reduce what it claimed would be CAFTA’s negative impact on the
industry, is unlikely to achieve such victories in future trade agreements.

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source: USF