ASSOCIATED PRESS
Representatives for the Central American Free Trade Agreement, including U.S. Trade Representative Robert Zoellick, center, met with the media yesterday.
Sugar industry upset
over trade agreement
NEW ORLEANS >> A trade agreement that will allow more Central American sugar to enter the United States without duties "is just the beginning" of an eventual flood of sugar that could devastate U.S. sugar growers, the head of a trade association said yesterday.
Included in the Central American Free Trade Agreement announced by the Bush administration was a deal under which four Central American countries will see their current quota of sugar they can ship into the United States rise by more than 75 percent next year.
The current limit is 111,000 tons. It will rise by 85,000 tons next year and then increase by 2 percent per year for the next 15 years. The amount of the U.S. market supplied by the Central American countries would total about 1 percent in the first year of the deal and rise to 1.4 percent at the end of 15 years.
The agreement must be approved by Congress, which will not be allowed to make any changes.
Charles Melancon, head of the American Sugar Cane League based in Thibodaux, La., said that while the amount by percentage may seem small, "the actual amount by tons of sugar grows to be very large."
"The prospects of having to negotiate similar agreements with Australia and Brazil and South America will then be the nail in the coffin," Melancon said.
In Hawaii, a once-dominant sugar industry showed signs of a small comeback last year. While sugar represents just a small part of Hawaii's $511 million agriculture industry, farm-level sales rose 11 percent to $64.3 million last year, while sales of raw sugar also rose nearly 11 percent to $95.9 million.
Production of sugar cane for sugar increased about 11 percent to 2.1 million tons last year at Hawaii's two remaining sugar companies, Hawaiian Commercial & Sugar Co. of Maui and Gay & Robinson on Kauai, according to figures from the Hawaii Agricultural Statistics Service.
As recently as last week, U.S. Rep. Billy Tauzin, R-La., said he had ironclad assurances from the White House that sugar would not be part of a final CAFTA deal. Tauzin had said that the Bush administration had to maintain publicly that sugar was on the table as a negotiating chip.
Ken Johnson, Tauzin's spokesman, said yesterday it is premature to talk of a final agreement over CAFTA.
"From our perspective there is no final agreement in place. Costa Rica has walked away from the table and textile issues remain unresolved," Johnson said.
Costa Rica abruptly left the negotiations on Tuesday, complaining that the United States was demanding too much in the way of removing barriers that prevent foreign competition in the telecommunications and insurance industries. But the administration said it hoped to include that country within the next few weeks before CAFTA is sent to Congress.
