CAFTA and Sugar — A Bogus Connection

By November 21, 2007Trade

In the post below, we linked to a Hill story about Senator Norm Coleman (R-MN) taking some political heat from domestic sugar interests for having voted for CAFTA. Key paragraph from the article:

Much is at stake for Coleman, who faces a tough road to reelection in a state with a large rural population and a sugar industry with a lot on the line in the farm bill. That industry is still smarting from Coleman’s 2005 vote to approve the contentious Central American Free Trade Agreement (CAFTA), but the farm bill includes key provisions that could protect the industry from a flood of low-priced imports.

After the post, we (only then) thought to ask Frank Vargo, NAM’s vice president for international affairs, about the arguments made in the story. His reponse: CAFTA is a ridiculous issue to raise in the context of sugar imports because of the tiny amount of sugar the agreement allows into the United States.

From a USTR factsheet on CAFTA:

Many Americans consume somewhere between 10 and 20 teaspoons of added sugar per day. By comparison, increased sugar market access for Central America and the Dominican Republic under the CAFTA amounts to only about one and half teaspoons per week per American.

  • Increased sugar market access under the CAFTA amounts to only a small portion of U.S. sugar production. The increased access in the first year of the agreement is equal to little more than one day’s production in the United States.
  • In the first year, increased sugar market access for Central American countries and the Dominican Republic under the agreement will amount to about 1.2 percent of current U.S. sugar consumption, growing very slowly over 15 years to about 1.7 percent of current consumption. Total U.S. sugar imports have declined by about one-third since the mid-1990s. Sugar imports under the agreement would not come close to returning total U.S. sugar imports to those levels.
  • U.S. over-quota tariffs on sugar will not change under the CAFTA. The U.S. over-quota tariff is prohibitive at well over 100 percent, one of the highest tariffs in the U.S. tariff schedule.
  • Under NAFTA, approved in 1993, increased imports of sugar from Mexico were postponed until 2008. Got that? Fifteen additional years of protection for the sugar industry were included in NAFTA as a political sweetener. (Good backgrounder from the Center for Responsive Politics.)

    So, yes, the domestic sugar industry, including sugar beet growers and processors, has some adjustments to make in 2008 and thereafter. But the facts are that NAFTA was approved in 1993, Norm Coleman was elected to the U.S. Senate in 2002, and Congress adopted CAFTA in 2005.

    Using the Senator’s support for CAFTA to gin up rural opposition to his re-election is cynical and specious. The tactics should leave a sour taste in the mouths of Minnesotans.

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