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STEAMBOAT SPRINGS, CO – At the American Sugar Alliance’s
International Sweetener Symposium here today, policy experts from
Paris, Rome, and Washington, D.C., noted that not only has there
been no progress toward free trade in sugar in recent years, but
that the global sugar market may be moving in the opposite direction
– toward more protectionism.
In a paper prepared for the Symposium, Patrick Du Genestoux,
director of the French sugar research firm ERSUC, wrote that since
1995 “the Uruguay Round (of the World Trade Organization) has
simply led to a net increase in, at least, the declared overall
level of protection.”
Jennifer Nyberg, a commodity specialist with the Food and
Agriculture Organization of the United Nations in Rome voiced a
similar opinion. She said, “Given the recent cycle of very low
world prices and surplus sugar stocks, many countries have moved
toward more protection rather than less for domestic markets.”
Jack Roney, director of economics for the American Sugar Alliance
(ASA) in Washington, D.C., noted that as “U.S. and world commodity
prices have plunged to historic lows in real terms the past two
years, governments have rushed back into the marketplace to protect
farm prices, or income, or both, buttress their rural economies, and
ensure domestic food supply stability.”
Speakers noted the lack of progress toward sugar free trade in
regional agreements, as well as multilaterally. Nyberg said, “There
are 124 regional trade agreements worldwide at this time, most of
which substantially exclude sugar trade.”
Du Genestoux said regional agreements “are doing well globally,
but with no free trade on sugar. Sugar has been the exception about
everywhere.” He added: “If you can’t have 3 or 4 countries
agreeing on rules to be able to have free flows of sugar, one can
visualize how complex it would become for the 137 members of the WTO.”
Peter Buzzanell, an international sugar policy consultant also
based in the Washington area, provided some examples of the
exclusion of sugar from regional trade agreements: “Brazil has not
gotten free trade in sugar in MERCOSUR (Brazil, Argentina, Uruguay,
and Paraguay); problems with sugar are reported with the NAFTA,
ASEAN (Pacific Rim countries) and Central American agreements; and
sugar was left out of the new agreement between the northern
countries of Central America and Mexico.”
Speakers also noted that with both producers and consumers
insulated from world price movements by elaborate domestic policies,
the world sugar price remains unreliable, volatile, and unrelated to
the actual cost of producing sugar.
John Love, a senior commodity analyst with the U.S. Department of
Agriculture in Washington, said: “Sugar’s own inelastic demand
and supply are the helium inflating sugar price volatility both
domestically and on the world market... Volatility in the world
sugar market is notorious.”
ASA’s Roney said, “American sugar farmers want to have global
free trade in sugar because they are competitive by world standards.
They would welcome the opportunity to compete on a level playing
with foreign farmers, but not with their governments. But with so
little progress toward free trade, as this panel as noted, it is
critical that the United States maintain its minimal U.S. sugar
policy, as a buffer to the volatility of the world dump market for
sugar.”
The American Sugar Alliance is the national coalition of growers,
processors, and refiners of sugarbeets, sugarcane, and corn for
sweetener.
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