Statement from US sugar producers regarding US-Peru FTA

Statement from U.S. Sugar Producers Regarding U.S.-Peru FTA

The U.S. sugar industry strongly prefers that negotiation of sugar market access occur
in the multilateral, comprehensive WTO context, where foreign subsidies can also be
addressed, rather than in bilateral and regional FTAs, where subsidies are not
addressed. U.S. market access concessions in FTAs make us more vulnerable to
foreign subsidies, without addressing the foreign subsidies, and without any possible
progress in improving conditions in the highly distorted world dump for sugar.

Peru historically is a net importer of sugar but the U.S. has imported at least 43,000
metric tons of sugar from Peru each year under our minimum import obligations in the
WTO.

In retaining the second-tier tariff on sugar imports from Peru, the U.S. is consistent
with its recent trade agreements with other sugar producing nations, even those that are
major exporters, such as Australia and Central America. The U.S. sugar industry
appreciates the U.S. negotiators’ recognition of the importance of retaining the second-
tier tariff. We urge that the second-tier tariff not be reduced in any regional or bilateral
agreement, including the remainder of the U.S.-Andean negotiations.

We also note that each of the countries involved in the Andean FTA talks already
receives a duty-free share of the WTO-mandated U.S. sugar import tariff-rate quota.
The proportionate additional access the U.S. Administration agreed to in the Peru
model is considerably more reasonable than the excessive access granted in the
CAFTA. In the CAFTA, the U.S. more than doubled the Central American countries’
guaranteed access to the U.S. market, which forced the U.S. sugar industry to oppose
the agreement.

U.S. sugar import needs this year are higher than usual because of recent hurricanes.
But the U.S. sugar market has been, and is likely to be, oversupplied well into the
future, as a result of mandatory import commitments under the WTO, the NAFTA and
the CAFTA. These agreements already seriously threaten the future sustainability
of our producers. We believe that the restrictions on additional sugar imports from
Peru reflect our negotiators’ understanding of the serious threat of additional imports to
an oversupplied U.S. sugar market. We commend Ambassador Portman for
recognizing this threat, and we urge U.S. negotiators to extend this reasonable
approach to the remaining countries in the Andean trade agreement discussions.

American Sugar Alliance
December 8, 2005

source: ASA