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IDFA Opposes Sugar Agreement That Would Unravel NAFTA

Jan 28, 2008

IDFA Opposes Sugar Agreement That Would Unravel NAFTA

Although the final trade barriers on sugar crossing the U.S.-Mexico border fell on January 1 with the full implementation of the North American Free Trade Agreement (NAFTA), some segments of the countries' sugar industries are calling for legislation that would restrict U.S. sugar imports from Mexico and other countries.

The U.S. sugar lobby, which supports a proposed agreement to manage post-NAFTA sugar trade, wants to insert the deal in the conference report on the 2008 Farm Bill (H.R. 2419). The agreement calls for a quota on future Mexican sugar exports to the United States, limits on third country imports of sugar, and requires the United States to ban sugar re-exports to Mexico. The deal would not only limit the amount of sugar in the United States, but it would set a negative precedent with U.S. trading partners.

"At a time when the United States. is pressing for trade liberalization through free trade agreements and the World Trade Organization Doha Round process, it would be wrong to go back on our NAFTA commitments," says Clay Hough, IDFA senior group vice president and general counsel.

The Mexican market has been a resounding success for U.S. food and agricultural exporters, including dairy processors. Last year, dairy exports to Mexico were valued at more that $800 million.

"Mexico is our number one market, and we don't want to lose the benefits of NAFTA," said Hough. "If the United States implements this managed-trade proposal, it's likely that other Mexican agricultural sectors, such as dairy, would ask for similar protection from U.S. exports to Mexico."

IDFA is a member of the Sweetener Users Association (SUA), which strongly opposes limiting sugar trade with Mexico and urges reform of domestic sugar policy to make the program more market oriented. In 2006, the dairy industry used approximately 1.1 billion pounds of sugar, representing 12% of the total amount of cane and beet sugar used for industrial food processing in the United States.

IDFA is working with SUA and the Sugar Policy Alliance to urge Farm Bill conferees to reject the sugar deal in conference.


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