November 29, 1999

A group of 15 sugar producing countries representing 65% of the world's free market sugar exports are urging Trade Ministers to commit to serious reform of the global sugar market in the WTO. The Global Alliance for Sugar Trade Reform says that trade-distorting sugar policies in the US, EU and Japan impose an enormous cost on the world's efficient sugar producers, especially in developing countries where agriculture is the main source of employment.

Sugar producers from Argentina, Australia, Brazil, Canada, Columbia, Costa Rica, El Salvador, Guatemala, Honduras, India, Nicaragua, Panama, South Africa, Thailand and the Philippines have banded together with sugar users in the US and EU to form this Global Alliance. They want significant trade liberalization for sugar in the next round of World Trade Organization (WTO) negotiations which begin November 30 in Seattle. Specifically, they seek the elimination of export subsidies, the elimination of trade distorting domestic support and increased market access for sugar.

In spite of gains made in the last round of the WTO, sugar markets in many countries remain extremely distorted. Sugar programs in the US, EU and Japan not only restrict imports from efficient producers, but also lead to surplus sugar production which is then sold on the world market with export subsidies or dumped. For example, the EU has gone from being a net sugar importer in the 1970's, to one of the world's largest exporters of refined sugar under its sugar regime. Subsidized exports have a negative impact on world prices and the incomes of world-market producers. The Global Alliance notes that many world- market producers are in developing countries that depend on agricultural exports for employment, but cannot compete with the treasuries of the US, EU or Japan.

US Groups also Seeking Reforms

Separately, US sugar users are also seeking relief in the WTO. In his August testimony before the House Ways and Means Subcommittee on the United States Negotiating Objectives for the World Trade Organization, Stephen G. Lodge of the (US) National Confectioners Association made the following remarks about the lack of progress on sugar in the WTO to date:

"The Uruguay Round agreements and Freedom to Farm bill also made only minor changes to the US sugar program. Imports continue to be tightly restricted through the use of tariff-rate-quotas for both raw and refined sugar and on products containing sugar. As a result,(US) domestic prices typically average 2-3 times the world price. . .The US is admittedly not the only WTO member that contributes to the distortion of world trade in sugar. The European Union does so by fixing the intervention price for white sugar at approximately three times the world price, controlling production through national quotas, and subsidizing refined sugar exports in order to compete on the world market and clear the internal market of excessive inventories."

More of Mr. Lodge's testimony is available from the Coalition for Sugar Reform website at
www.sugarreform.org