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TPP provides light at end of the sugar subsidy tunnel

Sugar 3

Critics of Rep. Ted Yoho’s “Zero for Zero” resolution who say it can’t be done should heed the wisdom of getting out of the way of people already doing it.

Z4Z – in which the United State would eliminate its sugar program of relatively minor import restrictions and tariffs in return for other nations simultaneously eliminating their own, far more aggressive direct subsidies to sugar famers and producers – needs to be negotiated.

“Wishing” is not a realistic means to the end.

An example of how this could, if Congress pursues such a course, resolve much of the world’s problem in the heavily distorted sugar market is the recently finalized Trans-Pacific Partnership (TPP) agreement.

Under the agreement – with give and take on both sides – Hal Conick of Confectionery News notes that “Australia would be allowed to provide an additional 65,000 metric tons of sugar to the US” which will be duty free and with no quota tariff.

“In addition,” Conick notes, “US export tariffs to Vietnam, which currently stand at 20%, will be eliminated by 2026.”  And Canada will be allowed to export “an additional 9,600 metric tons of refined beet sugar as part of the agreement.”

While most U.S. sugar producers, given their druthers, would have probably preferred that things stay just the way they are, they accepted the deal because it wasn’t so egregious as to drive them out of business.  But that was the end goal of candy makers, who clearly wanted more.

“Of course we wanted more, but this is what we’ve got,” said Rick Pasco, president of Sweetener Users Association (SUA).  “There will be future opportunities with trade agreements.”

And that is exactly the point of Rep. Yoho’s Z4Z resolution.  Everything is and should be negotiable, including the subsidies of our trading partners.

Rather than pursuing futile efforts to eliminate the U.S. sugar program unilaterally – leaving our domestic sugar industry vulnerable to a greatly distorted and artificially cheap global market – Congress should pursue trade agreements on sugar through the World Trade Organization (WTO) or other appropriate vehicles.

It’s not a question of whether or not such agreements could be negotiated.

It’s a question of whether or not policymakers are willing to stand up for America’s farmers and demand real subsidy reforms abroad.

As TPP has shown, where there’s a will, there’s a way.