The American Sugar Alliance, the main lobby group for American sugar growers, released a report last week alleging that the subsidies given to Brazilian sugar growers are depressing the world price of sugar perhaps by 25 to 30 percent. But instead of thanking the Brazilian taxpayers for their gift of cheap sugar, apparently the ASA are suggesting that U.S. trade negotiators “add it to their agenda”, implying that they should challenge the subsidies using the World Trade Organization’s dispute settlement mechanism. From Inside U.S. Trade [$]:
The American Sugar Alliance (ASA) this week released a report estimating that Brazil subsidizes its sugar industry so grossly that it may be depressing the world price for the commodity by as much as 25 to 30 percent. ASA is hoping the report will give further ammunition to its claim that eliminating the U.S. sugar program would be devastating to U.S. producers, even as sweetener users continue a fight to unravel the program through a variety of avenues. The report, authored by sugar and ethanol industry analyst Patrick Chatenay, estimates that Brazilian sugar producers benefit from as much as $2.5 billion in direct and indirect subsidies annually. Factored into that number are benefits accruing to the industry from the “economies-of-scale” for sugar production, which are driven by the heavily subsidized ethanol sector, the report argues. Jack Roney, ASA’s director of economics and policy analysis, said in a conference call with reporters that the $2.5 billion annual estimate may even be conservative. “This report underscores the importance of maintaining the current U.S. sugar policy, which was designed to fleece consumers and deny them access to cheap sugar shield consumers from foreign market manipulation and ensure an continuous flow of rents to sugar producers affordable, homegrown supply of a food staple,” he said. [Emphasis and snarky commentary added.]
Read more at http://www.cato.org/blog/american-sugar-alliance-looks-brazilian-gift-horse-mouth
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