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Sugar Industry Rejects Import Agreement That Would Produce Ethanol
June 30, 2005
By Jeff Zent, The Forum

The sugar industry isn't buying into a plan that Sen. Norm Coleman, R-Minn., helped broker with the White House.

He claims the deal protects the nation's sugar industry from a controversial trade agreement.

The Central American Free Trade Agreement threatens to flood the United States with cheap foreign sugar. In the Red River Valley, the trade accord jeopardizes a sugar beet industry that injects $2 billion into the regional economy and provides 33,000 direct and indirect jobs, industry leaders say.

If Congress passes CAFTA, the agreement would eliminate most tariffs on about $33 billion in goods traded every year between the United States and Costa Rica, the Dominican Republic, Guatemala, Nicaragua, El Salvador and Honduras.

CAFTA countries could collectively sell about 317,000 metric tons of sugar in the United States without paying tariffs. In the first year of the agreement, they could export about 110,000 metric of sugar, duty-free. Their market access would then increase 2 percent each year for the next 15 years.

CAFTA reports available

Under the deal made with Bush officials, the government would buy imported sugar that exceeds what the U.S. market could bear. The sugar would in turn be used to make ethanol, Coleman said.

The deal applies to CAFTA and any other trade agreement for three years, until the next farm bill is drafted, he said.

"Bottom line, I've bought my friends in the sugar industry an insurance policy," Coleman said.

The White House concessions haven't changed local sugar beet farmers' distaste for CAFTA, said Nick Sinner, executive director of the Red River Valley Sugarbeet Growers Association.

"That's a short-term fix," Sinner said. "We're looking for a long-term solution to our concerns because CAFTA is a long-term deal."

The nation's other sugar producers don't consider it a sweet deal either, said Phillip Hayes, a spokesman for the American Sugar Alliance.

"We remain steadfast in our opposition to CAFTA," Hayes said.

With the sugar concessions, Coleman said he will support CAFTA's passage.

"I'm at political risk now, absolutely," he said. "I'll be measured by what happens over the next three years."

Supporters and opponents of the Central American Free Trade Agreement are stepping up their efforts to sway congressional votes.

"There's a lot of arms being twisted in Washington," Sinner said.

"The administration is putting a lot of pressure on people for this and we're letting people know how important this issue is for us as well," he said.

CAFTA could be voted on Friday in the Senate, where there appears to be enough support for its passage, said Sen. Kent Conrad, D-N.D.

"I think it's a mistake," he said. "We have little to gain and yet our negotiators are willing to put the entire sugar industry at risk."

The Senate Finance Committee endorsed CAFTA Thursday, approving the trade accord on a 61-38 vote.

The House Ways and Means Committee is expected to give CAFTA its support today. But the agreement is expected to have its toughest fight on the House floor after the July 4 break, said Rep. Earl Pomeroy, D-N.D.

It's not just CAFTA that scares Foxholm, Minn., sugar beet farmer Doug Etten.

It's CAFTA and other similar agreements that threaten to flood the U.S. market with foreign sugar, he said.

"We've got a lot invested out here," said Etten, a member of the Wahpeton, N.D.-based Minn-Dak Farmers' Cooperative.

"If we start to lose our markets, it will have a huge impact on the whole area, not just farmers," he said.

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