CLEWISTON - This sugar-producing town of 7,000 residents on the banks of Lake Okeechobee may well be ground zero for the toughest trade battle in Congress this year.

Politically powerful sugar producers in what's called "America's Sweetest Town" are pushing to defeat the proposed U.S. free-trade agreement with the Dominican Republic and five Central American nations known as DR-CAFTA.

They claim that DR-CAFTA provisions boosting yearly U.S. sugar imports by less than one week's U.S. output will be the beginning of the end for America's sugar production, setting a dangerous precedent for other trade deals and eventually killing an industry that supports more than 300,000 U.S. jobs.

"This is death by duck bites, and in the end, you're dead," said Robert Buker, executive vice president of Clewiston-based U.S. Sugar Corp.,which wants Washington to exclude sugar from all free-trade agreements.

But advocates of freer trade with America's neighbors say the government-supported U.S. sugar industry is overstating the threat, and in any case, could obtain relief through provisions already in DR-CAFTA.

Supporters say the long-coddled industry threatens to derail an agreement with far broader goals, from opening markets for U.S. exports to boosting fledgling democracies. DR-CAFTA also is a key stepping stone to build the long-touted 34-nation Free Trade Area of the Americas, with its headquarters possibly in Florida.

"An overwhelming majority of the Florida congressional delegation supporting DR-CAFTA is crucial to our efforts to have Miami selected as the Permanent Secretariat of the Free Trade Area of the Americas," said Jorge Arrizurieta, who heads the group pushing for Miami to host the coveted office.

DR-CAFTA goes to Capitol Hill for its first Senate hearing Wednesday. The Bush administration wants Congress to pass it by summer. A broad business coalition -- including transport companies, banks, and apparel retailers -- is pushing for passage. It claims the agreement will help the Americas compete against Asia and stem migration to the United States.

Yet in this sugar town, where global competition already has prompted a shift toward more-advanced technology and forced cutbacks in farm and factory jobs, the talk is not of the big picture or lofty goals.

Clewiston-born Trey Dyess, a 40-year-old farm manager who has worked 21 years at U.S. Sugar, is blunt about why he opposes DR-CAFTA and other trade deals being discussed that would expand U.S. imports of sugar.

"It's our jobs," said Dyess, watching as flames licked the skies to burn off dead leaves from cane stalks before harvesting. He recalled when teams of men used to cut cane in his hometown, before machines took over harvesting in the 1990s to reduce labor costs and better compete with lower-wage Guatemala and other developing nations.
Big Sugar's sweet deal.

The U.S. sugar industry has good reason to reject free trade. It has long enjoyed government protection. Today, Washington keeps U.S. prices stable -- and higher than the world price -- by limiting imports through tariff quotas and by adjusting domestic output through marketing allotments that specify how much producers can sell.

DR-CAFTA would allow an extra 107,000 metric tons of sugar under tariff quotas the first year, or roughly 1.2 percent of current U.S. sugar consumption. Extra imports would rise to 151,000 metric tons in 15 years, still less than 2 percent of today's consumption, according to the Office of the U.S. Trade Representative or USTR.

Those limited imports are too little to destabilize the government-backed system, USTR said.

But they're enough to slash profits for sugar companies, executives claim.

The reason: Under the system, Washington must reduce domestic marketing allotments to offset imports. So, less sugar will flow through costly machinery handling domestic crops, hurting an industry that makes its money on volume. Diminishing profits can hasten job losses.

"Maybe some people at USTR thought they were doing us a favor by only taking 100,000 tons of sugar a year into our market. It's clear they don't understand our business," said Robert Coker, U.S. Sugar senior vice president.

The U.S. sugar industry long has put its money where its mouth is to keep government protections. For the 2004 election, it gave more to congressional candidates -- $2.4 million -- than any of 46 agriculture groups tracked by Washington, D.C.-based PoliticalMoneyLine, said Kent Cooper, co-founder of the political contributions database.

Building momentum

But the industry's glow may be fading. Criticism is growing against propped-up U.S. sugar prices from major consumers such as candy and cereal companies. Those include Battle Creek, Mich.-based Kellogg Co., where new U.S. Commerce Secretary Carlos Gutierrez had been chief.

Plus, the White House is impatient. It wants DR-CAFTA passed fast, so finance-related committees in Congress can debate its proposed changes to Social Security.

So free-trade supporters now are seeking ways to win over sugar producers -- or at least, neutralize them.

They cite a section in DR-CAFTA that lets Washington cut sugar imports and provide "alternative compensation" to foreign suppliers whose sales are trimmed, if the U.S. sugar program is threatened.

But the industry remains "very skeptical" that a compensation plan could work, said Phillip Hayes, a spokesman for the Arlington, Va.-based American Sugar Alliance.

"My understanding is that it would take the Appropriations Committee and an act of Congress to approve compensation. Are we talking about an annual debate in Congress? That's not too attractive for us," said Hayes.

That leaves the sugar industry embittered and fighting against DR-CAFTA, as the Senate Finance Committee prepares to hold its first hearing on the trade pact Wednesday.

A look at DR-CAFTA

What: A plan to slash trade, investment and business barriers between the United States, Dominican Republic and five Central American nations: Guatemala, Honduras, El Salvador, Nicaragua and Costa Rica.

Why: The agreement is a step toward the 34-nation Free Trade Area of the Americas, aiming to link economies in the Americas to better compete with a uniting Europe and emerging Asian bloc.

How: The agreement ends duties on most U.S. exports to DR-CAFTA nations immediately, and phases out nearly all the rest over 20 years. The bulk of exports from DR-CAFTA countries to the United States already enter duty-free under U.S. trade programs started in the 1980s to help stem leftist regimes in the Caribbean Basin region.

When: Concluded in 2004. Must be ratified by legislatures in all seven nations. El Salvador, Honduras and Guatemala have approved. The Bush administration hopes Congress will pass before summer recess.