July 31, 2008

TORONTO –World Trade Organization (WTO) Ministerial talks collapsed this week amid disagreements between developed and developing countries on agricultural trade liberalization. The talks involved trade and agriculture ministers from over 30 countries negotiating to reach an agreement to reduce domestic subsidies and international trade barriers.

Canadian Sugar Institute (CSI) President Sandra Marsden, who was in Geneva last week for the Ministerial talks, was disappointed with the collapse of negotiations. “The collapse of these talks represents a substantial setback for the Canadian sugar industry” stated Ms. Marsden. “The deal that was on the table had the potential to deliver significant benefits to Canadian sugar, by reducing foreign subsidies and creating new export opportunities to the U.S. and other markets.”

Without a Doha round deal the policies causing the greatest distortions in the world sugar market will continue unchecked.

  • Market access restrictions on sugar will not be reduced.

    • The U.S. and the EU will not be required to open their markets or reduce their tariffs. Due to the recently passed U.S. Farm Bill, access opportunities to the U.S. will actually worsen for Canadian sugar producers

  • There will be no reduction in domestic subsidies and price supports for sugar producers in the U.S., EU and other countries.

    • In addition, price supports for U.S. producers will be increased over the next 5 years through the new U.S. Farm Bill.

  • The EU will retain its ability to use export subsidies to dispose of surplus production at artificially low prices.

In the absence of significant multilateral liberalization, Canada’s refined sugar producers will remain locked into their own market while facing increased import competition. Bilateral trade agreements between Canada and surplus sugar producers such as Colombia and Guatemala will only increase the threat to the Canadian industry without providing any meaningful offsetting market access.

The multilateral process continues to be the best method for addressing distortions in the world sugar market. The Canadian Sugar Institute will continue to work with supportive interests including the Global Sugar Alliance and the Canadian Agri-Food Trade Alliance to push for a WTO deal that reduces subsidies and trade barriers while providing meaningful market access opportunities for Canadian sugar producers.