Tuesday, February 17, 2004

Sweet Tooth

I have a sweet tooth, I love candy and anything with sugar in it. That is why I am particularly annoyed with the Bush administration's latest "Free Trade Agreement". Read this

Washington uses preferential loan agreements and tariff-rate quotas to keep the price Americans pay for sugar artificially high. Although there is fluctuation, U.S. consumers paid roughly twice the world market price for sugar between 1985 and 1998.[1] The gap has been even worse in recent years. Currently, a March 2004 contract on domestic sugar costs 20.35 cents per pound while the same sugar at world prices costs 5.74 cents per pound. [2] In other words, because of the sugar program, a U.S. buyer is forced to pay three and a half times the market rate for sugar.

The U.S. sugar program stands in stark contrast to the Bush administration's avowed goal of igniting "a new era of global economic growth through a world trading system that is dramatically more open and more free." [3] Most recently, the yawning chasm between free-trade rhetoric and the reality of sugar protectionism was highlighted in negotiations for a free-trade agreement (FTA) between the United States and its close ally Australia.

Even though negotiators missed an end-of-year deadline set by President Bush and Australian prime minister John Howard, U.S.-Australian FTA negotiations made significant progress over the course of 2003. For the past two weeks, however, the talks threatened to fall apart, with much of the bitterness centered on the U.S. sugar program. The U.S. position was that increased market access for sugar is not an option, while Australia insisted that its exclusion would be a deal breaker. [4]

Mark Vaile, the Australian trade minister, and Robert Zoellick, the U.S. trade representative, met regularly in Washington during this period in a dogged effort to save the agreement. In the end, they succeeded—sort of. On Sunday, negotiators announced that Australia had capitulated and accepted a deal that excludes sugar. The United States, in turn, had softened demands that Australia open up a number of protected sectors. This fight to "keep sugar off the table"[5] was a disappointing departure from the prior U.S. commitment to negotiate high-quality FTAs that open markets for all products across all sectors.

What else is there to say? Ever wonder why there is so much corn syrup in the food we eat? Well part of the answer lies in the different types of protection the producers of cane sugar receive relative to producers of corn syrup.

It has caused us to battle with Mexico...and remember an eye for an eye leaves you both blind.

Keywords: ECO120, ECO499, Trade, Sugar

No comments: