USDA lobbies sugar industry to support Pacific trade deal

A US Department of Agriculture official on Wednesday used a sugar industry gathering to press the importance of the Trans-Pacific trade pact that US sugar farmers worry could overwhelm the market with excess supplies and hurt prices. The agreement is critical for US exports and agriculture as a whole, said USDA Under Secretary Michael Scuse at a conference in Bernalillo, N.M., attended by sugar farmers and policymakers, an audience with little to gain from the 12-country agreement.

“If we don’t do this, we will be left behind” on new export markets, Scuse said. He sought to garner support from the small but powerful sugar lobby. The United States is a net importer of the sweetener, leaving sugar as one of the country’s only agricultural sectors that does not view the landmark TPP deal as a gateway to new markets and instead as a risk to market share. “We are working to ensure sugar is included in TPP negotiations,” Scuse said, saying sugar cannot slow the progress but that the US government wants a deal that does not “interfere” with the sweetener industry’s federal support program.

TPP talks stalled last week as disputes grew over products like automobiles and dairy. Sugar has also been considered a sticking point. The US sugar market is highly managed through a complex system of price supports and import quotas that the government doles out to countries like the Dominican Republic and Australia. Australia earlier this week rejected a US government offer for 152,00 tonnes.

A pending sugar trade deal with Mexico that establishes reference prices and an imports quota has made granting additional quota under TPP even more tricky. Allowing more imports from Australia would reduce demand for Mexican sugar and could ultimately threaten the US-Mexico deal, which gives Mexico all access to US demand beyond domestic production and already-established tariff-rate quotas.

That pact is considered integral to preventing a repeat of 2013, when North American supplies swelled and the USDA spent more than $250 million scooping up excess inventories through the typically no-cost sugar program. Those soaring costs intensified criticism of sugar’s federal program from policymakers and users who say it inflates domestic prices.

Copyright Reuters, 2015


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