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AMERICAN SUGAR ALLIANCE (ASA) POSITION ON WTO NEGOTIATIONS AND CANCUN FRAMEWORK PROPOSAL FOR AGRICULTURAL NEGOTIATIONS Free Trade Position The ASA endorses the goal of genuine global free trade in sugar. American sugar producers are efficient and among the world’s low-cost producers. We would welcome the opportunity to compete with foreign producers on a level playing field free of government intervention. The world sugar market is highly distorted by a vast array of subsidies and other trade- distorting programs, both direct and indirect. We have identified for the Administration the most important of these programs. The only way to achieve the goal of free trade in sugar is through sector-specific, comprehensive, multilateral negotiations in the WTO - all countries, all programs. Trade liberalization must include developing countries, which provide three-quarters of the world’s sugar production and exports. Cancun Framework Proposal: Grave Concerns Remain ASA supports a successful Doha Round and, therefore, recognizes the need, at this stage in the negotiations, to narrow differences and establish a structure for reaching agreement on modalities - the aim of the framework proposal contained in the Draft Ministerial Declaration. Because the framework contains very few numbers, it is impossible to assess adequately its potential impact. The tough decisions, which will determine the actual effects of the negotiations, are put off to the future. It is clear, however, that while there are some positive developments in the framework proposal, there are some very disturbing elements. Two of our greatest concerns: Excessive special and differential (S&D) treatment for developing countries, which account for 75% of sugar production and trade. Continued failure to address the many indirect or less transparent trade-distorting policies that do not fall conveniently into WTO categories of domestic support, import access, and export competition. Examples include government ownership and control, cross-subsidization, indirect export subsidies, forced dumping, and currency devaluation. These policies must be addressed to curb the pervasive dumping that characterizes the world sugar market. The Administration must correct these and other flaws at Cancun if the negotiations are to lead to a successful outcome for the world sugar market, for the U.S. sweetener industry, and for all of U.S. agriculture. Cancun Framework Proposal: More Specific ASA Comments, Concerns Export Competition Agreement on the elimination of export subsidies for products of particular interest to developing countries is a step forward. Sugar is an obvious candidate for this list and this should be clarified as soon as possible. Elimination of export subsidies for all products, in all countries, must be achieved as part of the final outcome of the negotiations. The framework language on state-trading enterprises (STE’s) is weaker than that in the US-EU proposal or the Harbinson text; this should be reversed at Cancun. The current text will not significantly address the pervasive dumping of sugar onto the world market. Market Access Recognition of the need for a different approach for import-sensitive products is a positive development. If other WTO members are unwilling to undertake the fundamental changes in their trade-distorting policies, and fundamental reform of the grossly distorted world sugar market fails to occur, the U.S. must not concede changes in the U.S. import program for sugar. ASA shares the Administration view that the introduction of a completely separate market access scheme for developing countries, including the concept of special products, is unacceptable and must be corrected. This proposal could result in the evasion of any meaningful commitments by developing countries. Absent developing-country reforms, the Doha Round would not reform the highly distorted world sugar market and would be of little value to the U.S. sweetener industry or to U.S. agriculture. Quota-free access for least developed countries would render tariff-rate quota import programs inoperable and undermine the benefits the TRQ programs provide to developing-country participants. Domestic Support Several elements in the framework combine to point the negotiations in the direction of harmonizing domestic support levels - a key U.S. goal. U.S. supports must not be cut unless we achieve real harmonization of support levels, and hard commitments by other WTO members on other trade-distorting policies, which will reform the world sugar market and bring real benefits to U.S. agriculture. New
loopholes in special treatment for developing countries could negate
the potential
benefit to the world sugar market of reductions in developed-country
supports. ASA remains deeply concerned that the negotiators have not yet developed, nor shown any inclination to develop, an approach to deal with the myriad trade-distorting policies that do not fall neatly into WTO categories, and are especially egregious in the sugar sector. We reiterate our call for a sector-specific approach encompassing all significant policies and practices that distort the world sugar market.
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