U.S. to keep sugar
as part of trade talks

Hawaii industry workers and
retirees had protested the plan because
of the expected loss of area jobs

News that the Bush Administration will not take sugar off the table in the final negotiations for the Central American Free Trade Agreement has left some members of Hawaii's sugar industry with a bitter taste in their mouths.

The talks, which are taking place in Washington, D.C,. this week, are designed to lower trade barriers with allies in Central America.

Proponents of the trade deal say it will allow the impoverished people of Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua to buy more products from the United States as well as to sell more of their agricultural products in the U.S. market. However, many affiliated with Hawaii's sugar industry have said if the agreements include sugar, many local workers will lose their jobs.

More than 490 of Hawaii's sugar workers and retirees recently signed a petition asking Hawaii's politicians to urge U.S. Trade Representative Robert Zoellick to take sugar out of CAFTA talks. The petition also was sent to Gov. Linda Lingle, who already has asked President Bush to exempt sugar from any free trade agreement.

However, it appears Hawaii's efforts have been in vain. An official from the Office of the U.S. Trade Representative confirmed yesterday that the commodity will remain in CAFTA discussions.

"The point of the free trade negotiations is to be comprehensive and to negotiate a free trade agreement," said Richard Mills, USTR spokesman. "The general farm community is opposed to a sugar exemption."

Mills said the USTR is willing to consider other methods of addressing the concerns voiced by the sugar industry. In the past, the USTR has used longer phase-in periods and other mechanisms to lessen agreement impacts on industries.

Meanwhile, lobbyists for Hawaii's only two sugar plantations, Gay & Robinson Inc. and Hawaiian Commercial & Sugar Co., have stayed in contact with Hawaii's entire congressional delegation -- U.S. Reps. Neil Abercrombie and Ed Case and Sens. Daniel Inouye and Daniel Akaka -- encouraging them to remove sugar from the negotiations.

Hawaii's sugar companies, who are members of the American Sugar Alliance, strongly support price supports and trade barriers, said Dalton Yancey, a sugar lobbyist that represents sugar companies in Hawaii, Florida and Texas.

Although the decision to leave sugar on the negotiating table was a blow to the industry, Yancey said those impacted by the decision are hoping the agreement will be defeated in Congress.

"One of the things the administration has to consider as they go through trade agreements is whether or not they will have enough votes to pass it in Congress," Yancey said. "They can negotiate whatever they want, but it has to be able to get passed."

More than 21 Republican congressional members have already committed to vote against the agreement if sugar is not exempted, Yancey said.

Mills said the current U.S. offer on sugar would bring in "less than one half of one percent" of annual U.S. sugar consumption over the first three years of the agreement and that the increased sugar imports would not interfere with the sugar program. However, if the agreement gets passed, Yancey said it would essentially double the amount of sugar that CAFTA countries could export to the United States over the next 15 years. It also would allow countries to sell more sugar to the United States than stipulated by their quotas, he said.

And, if CAFTA passes, one of the major problems is the precedent it will set for negotiations with other countries. Similar free trade talks are soon planned for Australia, South Africa, Thailand and Brazil, Yancey said.

"Obviously we have hopes that things will work out, but so far we haven't seen a proposal that will," he said. "The administration has shown us what they've offered the Central American countries and we've told them that was unacceptable to us."

Hawaii's sugar industry has plans to stand firm, Yancey said.

"We've got the best of the best in Hawaii, but the industry couldn't take another blow," he said.

Alan Kennett, general manager at Gay & Robinson, said while Hawaii's sugar industry can compete against Central American sugar companies, it can't compete against foreign government subsidies.

"We can compete against sugar producers anywhere in the world, but it's not fair to expect us to hold our own against foreign governments," Kennett said.

Ken Schoolland, an associate professor of economics and political science at Hawaii Pacific University, who has argued against Lingle's support for the sugar program was pleased by the turn of events in Washington, D.C..

But he's not holding his breath. The sugar industry is very powerful and could still manipulate the system to get its exemption, he said.

"They have a lot of leverage. I wouldn't bet on the sugar price supports being limited," Schoolland said. "Sugar has been raised as an issue that was going to be reformed in the farm bills for many years, but the industry has very powerful muscle and has always been able to get exemptions."


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