AMERICAN TRADE NEGOTIATIONS
WORRY SUGAR INDUSTRY

Publication: Naples Daily News
Printed: Tuesday, December 9, 2003
Wrtitten by: Laura Layden

As U.S. and Central American leaders sat down Monday to continue negotiations for a new free trade pact, a local sugar grower felt anxious and afraid.

Key players fear the U.S. sugar industry may be sacrificed in the agreement, which would tie the U.S. economy with smaller ones in five Central American countries.

"You've got to remember the U.S. trade representative's job is to negotiate a trade deal and I just hope they don't trade away the American sugar farmers just to get a trade deal," said Robert Coker, a vice president with U.S. Sugar Corp. in Clewiston.

Not everyone is sympathetic. There are groups working to make sure sugar is left on the table in this week's negotiations -- including Florida environmentalists, who are concerned about the industry's impact on the Everglades.

Producers of other U.S. agricultural commodities, such as pork, are also lining up against the sugar industry in this battle. They fear if sugar is excluded from negotiations this week, they won't get more access to the Central American markets. Sugar is a priority for many of the countries involved in negotiating the regional agreement.

The negotiations for a Central American Free Trade Agreement come on the heels of a meeting on the Free Trade Area of the Americas agreement in Miami last month, which some viewed as a failure. The FTAA is a much broader agreement that would unite 34 countries in the Western Hemisphere, creating the largest trading bloc in the world.

While Coker has heard assurances from the Bush administration that the U.S. sugar industry will be protected in the smaller trade pact with Central America, he's not convinced. He said the message out of the U.S. trade representative's office is different. There are talks of lowering the U.S. tariffs on sugar from the five Central American countries, which would enable them to flood this country with cheap imports, Coker said.

"They are going to be able to dump sugar from around the world," he said.

Also, quotas could be lifted in the new agreement, allowing the Central American countries to ship more than twice the amount of sugar they can now to the United States. That would be a major blow to the U.S. industry, Coker said.

The five Central American countries involved in the negotiations are El Salvador, Guatemala, Nicaragua, Honduras and Costa Rica. Together, these countries have the ability to export 3 million tons of sugar to the United States. That's enough to "wipe out Hawaii, Florida, Texas and Louisiana sugar," Coker said.

There's already a surplus of sugar in the United States and new export opportunities are limited for U.S. growers because of trade barriers in other countries, he said.

"It would be a shame if they provided additional access for those Central American countries at the expense of thousands of American jobs and jobs right here in Florida," he said. In Florida, the sugar industry provides about 25,000 jobs. Nearly half of them are generated by United States Sugar.

"Florida produces more sugar than any other state in the nation -- and to trade away the thousands of farm jobs and farm family jobs here in Florida just to get a trade agreement, I wouldn't be very proud of that scalp on the wall," Coker said.

While U.S. sugar producers are pushing the Bush administration to take them out of this week's negotiations, other groups are lobbying hard to make sure that doesn't happen. Some are doing it in the name of "fair trade."

"Sugar has to be on the table if the U.S. is going to gain greater access to foreign markets for our agricultural commodities," said Jeff Nedelman, a spokesman for the Coalition for Sugar Reform in Washington, D.C. "That has been made abundantly clear. The U.S. sugar growers want a virtual monopoly on supply. We want free trade and fair trade."

The coalition, which is fighting to include sugar in all free trade agreements the United States is negotiating, represents Florida environmentalists, watchdogs of government spending and others.

They have found an unlikely ally in other U.S. producers.

For more than a decade, producers of government-subsidized agricultural commodities have hung together. But that is changing with the increasing international demands for more access to the U.S. market, Nedelman said.

"There is a huge crack now because the pork producers and the soybean producers and the wheat growers and corn producers now understand very, very clearly that should the U.S. sugar market remain closed they are going to be the international losers," he said. "They will pay the price."

Nedelman said he doesn't buy the sugar industry's arguments for why the tariffs should remain. He said lifting quotas and tariffs on U.S. sugar may hurt some producers in this country, but he doesn't believe it will wipe out the industry here. He says it's a "case of crying wolf."

"People who are growing fence post to fence post on marginal land would find something else to do," Nedelman said.

U.S. sugar producers have another argument for why they should be excluded from this week's negotiations. They say reductions in sugar tariffs should be negotiated at the global level through the World Trade Organization instead of by country or region. That's the only way to be fair to everyone, they say.

"Sugar is produced in 120 nations around the world -- and that is why we have advocated for a decade that we reform sugar and reduce tariffs on imports at the WTO," Coker said. "That's the only way you can be on a level playing field."

Nedelman characterizes U.S. sugar producers' argument that tariffs be dealt with at the WTO level as a "delay tactic." More global agreements have become harder to finalize, with WTO talks breaking down in Cancun in September.

The agreement with the Central American countries has taken on greater importance as talks of more global agreements have slowed.

The CAFTA agreement has been in the works for 11 months. It seemed to gain momentum after the WTO talks collapsed in Cancun. And it got another boost in Miami last month during negotiations for a hemispherewide FTAA. It was then that U.S. Trade Representative Robert Zoellick announced the CAFTA agreement was moving forward and that he planned to meet the Dec. 31 deadline he set earlier this year.

While the Central American Free Trade Agreement seems to pose the biggest threat to the sugar industry in Florida, there are other agricultural producers in the state keeping a close eye on this week's talks. The Central American countries don't produce many oranges, but citrus growers are still concerned about what the agreement will look like. It could set a precedent for future trade pacts, such as the FTAA, that have a greater potential to harm their industry.

Florida's citrus growers argue their industry will be wiped out if the U.S. tariff on Brazilian orange juice is lifted under the FTAA.

Brazil is already the world's No. 1 orange juice producer, and the state's growers say doing away with the tariff will only put them out of business and create a monopoly that won't benefit consumers.

"I think the citrus industry is watching CAFTA with a great deal of interest," said Coker, who is also a vice president for Southern Gardens Citrus, one of the state's top citrus growers. "But the primary concern that citrus growers have deals with tariffs on orange juice out of Brazil. That is where their big concern is."

The state's vegetable growers are also following the CAFTA negotiations, though they say the worst damage has already been done by the North American Free Trade Agreement, which ties the U.S. economy to those of Canada and Mexico.

"We are watchful that the administration takes Florida's import-sensitive crops into account when negotiating these sweeping trade deals," said Ray Gilmer, a spokesman for the Florida Fruit & Vegetable Association, one of the largest agricultural trade groups representing growers in the state.

Before NAFTA, Florida growers were given assurances their crops would be protected, but Florida farms suffered almost immediately after it took effect.

"We've learned our lesson from the NAFTA experience and want to remain as engaged as possible and keep reminding administration officials that Florida crops cannot be ignored or discounted when it comes to negotiating these trade accords," Golmer said.

Unlike last month's free trade talks in Miami, where Florida producers had the opportunity to mingle and meet with trade ministers, the CAFTA negotiations going on in Washington, D.C., are more private. That has Coker, who was in Miami for the FTAA negotiations and who attended WTO trade talks in Cancun earlier this year, even more nervous. He said he expects U.S. congressional representatives in the 17 states that produce sugar to watch the negotiations closely.

"This is going to be backroom negotiations," Coker said. "So the rest of us will sit out in the hallway and keep our fingers crossed and pray."

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