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Panama Proposal Is One of Many: Onslaught of FTAs Threatens U.S. Sugar Industry

Press Release: U.S. Sugar Industry Group

Panama Proposal Is One of Many: Onslaught of FTAs Threatens U.S. Sugar Industry

23 March 2004

WASHINGTON, March 23 /PRNewswire/ — A representative of the American sugar industry cautioned the Office of the United States Trade Representative today that a proposed trade agreement with Panama cannot be viewed in isolation. "It must be examined in the context of the numerous FTAs (free trade agreements) with sugar-producing and exporting countries now being pursued by the U.S."

The statement was made by Jack Roney, Director of Economics and Policy Analysis for the U.S. Sugar Industry Group, a trade association representing domestic growers, processors and refiners of sugarbeets and sugarcane. Roney said, "We believe it is clear that the opening of the U.S. sugar market to the vast quantities of exportable sugar produced by these FTA candidate countries, through either the elimination of duties or the expansion of duty-free tariff rate quotas or both, will lead to massive disruption of the U.S. sugar and sweetener market."

He said, "The U.S. sugar market, which is already oversupplied, clearly could not absorb such quantities ... The result would be the collapse in U.S. producer prices, massive sugar loan forfeitures to the government, and major costs to the U.S. taxpayers. Given the well-documented lack of pass-through of lower farmer prices, consumers would not benefit."

Roney noted that Panama, a significant producer and exporter of sugar, already has a "significant allocation" for duty-free shipment of 30,000 metric tons of sugar to the U.S. each year. The U.S. sugar industry has previously presented testimony to USTR concerning the disastrous impact of negotiating market access on sugar in trade agreements with Central America (CAFTA), Australia, the South African Customs Union, the Dominican Republic, the Free Trade Area of the Americas, and most recently with the Andean countries, Roney said. He will testify next week at USTR on the proposed FTA with Thailand, the world’s third largest exporter of sugar. Roney also reaffirmed the sugar industry’s opposition to the CAFTA, which would more than double the CAFTA countries’ access to the U.S. sugar market. The CAFTA must be approved by Congress before it can go into effect.

The U.S. Sugar Industry Group’s position is that the global distortions in the world sugar market need to be addressed globally in the World Trade Organization and not piecemeal in the bilateral and regional FTAs.