logo logo

CAFTA enemies outnumbered at forum

The Advocate, Baton Rouge, Louisiana, US

CAFTA enemies outnumbered at forum


Acadiana bureau

14 July 2005

LAFAYETTE — The spokesman for the sugar industry found himself outnumbered at a Wednesday forum on a proposed trade deal that the sugar folk hate and many other Louisiana business interests love.

Lafayette’s Le Centre International hosted the forum on the Central American Free Trade Agreement — a proposed deal between the United States and the Central American countries of Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua, plus the Dominican Republic in the Caribbean.

President George W. Bush has approved the deal, as has the U.S. Senate — over the opposition of both of Louisiana’s U.S. senators — leaving a U.S. House vote to decide whether the treaty is enacted.

Jim Simon, president and general manager of the Thibodaux-based American Sugar Cane League, spoke for the industry, which has said the deal will be the first step in the destruction of the domestic U.S. sugar trade.

Representatives of the Louisiana rice industry, the World Trade Center of New Orleans, the Port of New Orleans and a New Orleans shipping company spoke out in favor of the deal at the meeting.

Eugene Schreiber, managing director of the World Trade Center of New Orleans, said the trade deal would be a boon to Louisiana’s economy, especially agricultural interests other than sugar.

He said that the U.S. sugar trade would also not suffer too big a blow from CAFTA’s sugar provisions, which would initially allow an additional 109,000 tons of imported sugar into the U.S. free of import taxes.

That would rise to a total of 157,000 tons of sugar from the countries in the agreement within 10 years.

Schreiber said that with more than 10 million tons of domestic sugar produced, the tonnage in question isn’t that much, especially when weighed against the benefits for other agricultural commodities and industries.

Half of the goods the six countries import come from the United States, and the relaxing of trade restrictions in CAFTA would open the combined markets even further for U.S. rice, soybeans, cotton, chemicals, plastics, equipment and other goods, he said.

Schreiber said CAFTA is an especially good deal for the United States, because trade import restrictions from the countries in question are already low and the deal would even the playing field on restrictions to U.S. exports to the area.

Louisiana is geographically well positioned to take advantage of those markets and benefit from the increased trade in Louisiana-produced goods and out-of-state goods passing through Louisiana ports, he said.

Simon said the projected benefits of CAFTA are "wildly overstated" as are the purported benefits of the North American Free Trade Agreement, which he said was a template for CAFTA.

NAFTA cost Louisiana 13,000 jobs, of which only 7,000 were ever recovered, he said.

"CAFTA lies in its wake," Simon said.

He said Schreiber, in discussing the impact of the deal on the sugar industry, left out the fact that 41 countries already ship about 1.25 million tons of sugar into the United States free of import taxes.

Simon said U.S. rice and soybean producers already dominate the markets in the CAFTA countries, and he sees little gain for them in the deal.

He said that waiting behind the CAFTA deal are 21 other sugar-producing countries wanting access to U.S. markets, including a deal currently being negotiated with Thailand — the Thailand Free Trade Agreement, or ThaFTA — the second-biggest sugar-producing nation in the world.

"ThaFTA is nothing more than CAFTA on steroids," Simon said.

Simon said ThaFTA talks, along with an already agreed-upon opening up of the U.S. market to Mexican sugar under NAFTA, are part of an equation that "all adds up to the demise of the industry."

Jamie Warshaw, CEO of the Farmers Rice Milling Co. in Lake Charles, said he understands that some of Louisiana’s congressional delegation is in a tough spot when it comes to CAFTA.

"We all know we’ve put our congressional delegation in a real interesting position," he said.

Warshaw said he recognizes the difficulties the sugar industry has with CAFTA, but at the same time sees a real need in his industry for approval of the deal.

He said the CAFTA countries’ trade rules are constantly shifting, and CAFTA would stabilize the rules of engagement for trade.

Warshaw said a key component of the deal would be balancing the desire on the part of U.S. rice mills to export milled rice and the desire of the other countries to protect their economies by limiting milled rice to help keep their own mills in business.

John Hyatt, vice president for imports with the Irwin Brown Co. of New Orleans, said the trade agreement is a small one in the overall picture of U.S. trade, and one group — the sugar industry — has held sway in the trade debate far beyond its actual economic impact.

He said 80 percent of Louisiana agriculture is non-sugar and most of it benefits from the CAFTA deal.

Hyatt also questioned the sugar industry’s analysis of the impact of CAFTA on its producers.

"This agreement does not open a floodgate or set a template for future trade agreements," he said.

Hyatt warned that if sugar interests manage to get CAFTA beaten, then they could find themselves standing alone in future fights for protection, with no help from other agricultural commodities that could have benefited from the deal and who will feel "ill-used" by the sugar industry.