NFTC urges U.S. sugar policy reform

   The National Foreign Trade Council urges U.S. policy makers to reform the country’s sugar policy to reduce barriers to trade, maximize U.S. exports, enhance the competitiveness of American farmers and encourage trading partners to expand agricultural market access.
   NFTC President Bill Reinsch told attendees at the Cato Institute’s Capitol Hill briefing on Friday that the current U.S. sugar policy relies too much on government-regulated price floors, marketing quotas, and import restrictions, and prevents the sugar market from operating efficiently.
   “At the most basic level, all trade negotiations are a series of tradeoffs among sovereign nations,” Reinsch explained. “Current sugar policy means that our negotiators must defend import quotas and high tariffs at the same time they are trying to get other countries to abolish quotas and reduce tariffs. This inconsistency does not enhance U.S. leadership.”

Reinsch

   He said U.S. import quotas for commodities like sugar cause delays in opening other countries’ markets. “This happened in several free trade agreements, including the pending one with South Korea. Our decision to leave sugar out of the FTA with Australia created a precedent that helped keep rice out of the Korea FTA,” he said.
   Reinsch also underscored the impact that the sugar import quotas have on U.S. consumers. The Government Accountability Office estimated the impact to be $1.9 billion in consumer costs, while the International Trade Commission estimated the cost to be just over $1 billion.
   Reinsch said Congress would eventually need to reform the U.S. sugar program, especially if there is an agreement in the Doha Round of the World Trade Organization talks.
   “In the short run, there is a step the government could take now to allow increased trade in sugar — temporarily increase sugar import quotas so that developing countries can supply more product into a market that is forecast to be record-tight this year,” Reinsch said.

FreightWaves Staff