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The Dominican Republic-Central
America Free Trade Agreement (DR-CAFTA) offers
a small, but important, benefit to American families
in every state and congressional district in the
United States. It makes a dent in the fortress
that keeps U.S. sugar prices three and a half
times higher than those paid by families around
the world. It also provides some small relief
to U.S. manufacturers of sugar-containing products.
DR-CAFTA will not harm U.S. producers.
- DR-CAFTA provides for small increases in
the quotas the United States applies to sugar
imported from Costa Rica, El Salvador, Guatemala,
Honduras, Nicaragua and the Dominican Republic.
At the end of 15 years, the increase amounts
to 153,140 metric tons, which represents just
1 percent of U.S. sugar consumption in 2003.
It does not change the prohibitive tariff that
applies to imports outside the quota. Nevertheless,
this very small increase in market access is
a cause of concern to U.S. sugar producers.
- While the United States maintains its high
over-quota tariff of about 100 percent, DR-CAFTA
countries have agreed to phase out their sugar
tariffs over 15 years.
Reasons DR-CAFTA Sugar Provisions Will Not
Harm U.S. Producers
Increased sugar access
in first year represents:
- less than 1 percent of 2003 and 2004 total
U.S. sugar supply;
- about one-tenth of one month’s value of
U.S. sugar use; and
- about one day’s production of the U.S.
sugar industry, or 1.3 percent of U.S. production.
It could grow at most to just 1.7 percent
of U.S. production after 15 years.
The small increase in DR-CAFTA
sugar will reduce the prices domestic sugar
producers earn by just 0.72 cents per pound.
(DR-CAFTA allows the U.S.
government, if needed, to pay Central American
producers not to ship sugar to the United States.)
The U.S. sugar program
remains intact.
U.S. agriculture needs DR-CAFTA.
- The sugar controversy needs to be kept in
perspective. Farms growing sugar account for
less than one half of 1 percent of all U.S.
farms, while farms that stand to gain significantly
from DR-CAFTA include those raising beef cattle
(42 percent of U.S. farms), corn (23 percent),
soybeans (19 percent) and hogs (6 percent).
- Negotiating DR-CAFTA without sugar would
have significantly weakened the market opening
commitments of the United States’ DR-CAFTA partners
in these important agricultural sectors. In
addition, the U.S. sugar program remains intact.
- American sugar consumers, from producers
of candy and other sugarcontaining products
to American families, gain some small measure
of relief from high sugar prices thanks to DR-CAFTA,
and they must be remembered in the debate. dr-cafta
Advisory Committee for Trade Policy Negotiations.
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