May 03, 2004

TORONTO - In a presentation to a US sugar industry conference in Washington last week, Canadian Sugar Institute President Sandra Marsden offered a Canadian perspective on the global sugar industry, and a criticism of the United States' Sugar Policy which stands in the way of free trade.

Ms. Marsden explained that unlike in the United States, where the US government guarantees sugar producers an inflated price for their product while restricting would-be competitors' market access, Canadian sugar competes on the world market.

In the absence of the same type of generous price support as is provided in the US, the Canadian industry has rationalized; the number of sugar refineries and sugar beet plants in Canada has dropped from 14 in 1960 to just four today. The result is that Canada's sugar industry is one of the most efficient and competitive in the world.

"The Canadian experience demonstrates that there are advantages to be gained from competing fairly - without excessive protection. Canada's comparatively low price for sugar has been an important factor in encouraging many food processors to locate in Canada," said CSI President Sandra Marsden. "Food processing is now the top manufacturing industry in seven of ten Canadian provinces, and employs more than 300,000 Canadians."

US Sugar Policy is, however, distorting trade flows throughout North, Central and South America. Heavy restrictions on US market access mean that Canada's market provides a 'relief valve' for surplus sugar produced in the US as well as South and Central American Countries. Meanwhile, Canadian producers have virtually no opportunity to export sugar. "Every year we are losing market share," said Ms. Marsden.

The answer to addressing the distortion in the global sugar industry is a multilateral solution, through the World Trade Organization. In the interim, Canadian sugar producers will continue to advocate that regional trade agreements negotiated by the Canadian government must not worsen the imbalance for the Canadian sugar industry.