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Administration Stands by NAFTA Provisions, Opposes Side Sugar-Trade Deal

Feb 11, 2008

Administration Stands by NAFTA Provisions, Opposes Side Sugar-Trade Deal

America's sugar producers last Friday halted their efforts to push for separate sugar-policy recommendations in the 2008 Farm Bill when the Bush administration announced plans to oppose any attempts to legislate a side trade deal. This is a major victory for IDFA and the other food industry associations and companies that worked together to protest the sugar-trade proposal on Capitol Hill and at the White House.

Representatives from IDFA and other industry groups recently met with administration officials and sent a joint letter to all members of Congress, urging them to protect the North American Free Trade Agreement (NAFTA) provisions and reject the sugar proposal.

"The Administration cannot support recent sugar policy recommendations and will oppose efforts to implement them through legislation," said U.S. Trade Representative Susan Schwab and Agriculture Secretary Ed Schafer in a joint statement issued last Friday. "The (NAFTA) agreement reflects a balance of benefits agreed to by the parties. Any reopening of the agreement would upset that balance and put at risk other U.S. exporters of goods and services. For that reason, the administration has been and will continue to be clear and consistent in strongly opposing requests to reopen this agreement."

IDFA opposed the proposal, because it would have restricted U.S. sugar exports to Mexico and Mexican sugar exports to the United States. Adopting managed trade for sugar with Mexico would effectively amend the free trade provisions of the NAFTA by instituting export and import restraints. This action would cause other commodity groups in Mexico, including dairy, to ask for similar protection from U.S. exports.

Mexico is the biggest export market for U.S. dairy products, representing 28% of the overall export volume and more than $800 million in sales. In 2007, these sales jumped more than 98% over the previous year.

"We're thrilled that this unnecessary proposal was opposed by the administration and subsequently withdrawn by the sugar lobby," said Clay Hough, IDFA senior group vice president. "It would only have served to damage our trade with Mexico, our largest export market, and further inflate the cost of sugar in the U.S. market."

To read the administration's statement, click here.

To read the food industry organizations' joint letter to Congress, click here.

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Posted February 11, 2008

Dairy Delivers