The eye of the free-trade hurricane in the Americas is sugar, a multi-billion dollar business that has global producers crying foul while U.S. consumers buy homegrown, albeit protected—and pricier—sugar. At issue is access for foreign growers across the region. Few trade agreement issues are riddled with as many loopholes, especially for Brazil and the United States, two top sugar producers. U.S. Sugar Corp. Vice President Robert Coker spoke with Latin Trade Correspondent Alex Easdale about how the U.S. sugar industry competes.

Do you view free trade as a threat to the U.S. sugar industry?
I am not threatened by free trade. In fact, I propose free trade. Our industry is a proponent of free trade negotiated at the WTO [World Trade Organization], which will ensure a level playing field. This will in turn allow the most-efficient producers to compete. If you try to get ahead of the WTO process, then you create further imbalances in a system managed by 120 countries. Every country that produces sugar has programs to protect its sugar. In that context, 10 to 15 countries negotiating an agreement is not fair since there is government intervention in all of the countries with which we negotiate. I believe that U.S. Sugar is one of the world’s most-efficient producers and would compete very well with a level playing field. There have been 23 U.S. sugar producers that went out of business because they could not compete domestically.

What do you mean exactly when you refer to a level playing field?
Well, currently, [the United States is] required to bring in about 1.25 million tons of foreign-produced sugar. If you produce too much sugar, U.S farmers have to cut back on production and if you give additional market access to others, the CAFTA [Central America Free Trade Agreement] countries for example, this threatens our industry and we have to lay off our workers. In the U.S. we have a whole series of laws and values: We pay people a fair wage, have laws against child labor, etc. In some developing countries, there are children working twelve-hour days in the fields. They are different standards. We have labor and environmental standards that most countries do not have.

If other countries improved their labor and environmental standards, would you consider this to level the playing field?
Disparities in labor and environment are not the real problem—we could still be competitive. Government supports, marketplace support and infrastructure subsidies are not fair. It would be fair if all sugar producers had no financial subsidies. There are a great deal of agricultural programs in countries like those within the European Union, Brazil, Thailand and Australia to name a few. They dump sugar while U.S. producers are not able to export (to them). You have to negotiate this in a way where you reduce all those barriers. If you notice, all of the bilateral and sub-regional agreements exempted sugar, like Mercosur for example. Look at Australia and Brazil—they want access to the American market, yet theirs is a very subsidized industry where they provide grants to their farmers and processors. Australia recently bailed out their domestic industry with a US$400 million subsidy program. The Brazilians have significant subsidies, cancelled loans and supports for their sugar growers to produce ethanol. You simply cannot have it both ways—that is not fair trade.

What about the U.S. sugar tariff?
That is the tariff that was negotiated at the WTO. Initially it was $0.18 per pound and now it is 15.6 cents for all sugar that enters the U.S. over the 1.25 million [ton] minimum limit. Look within the NAFTA agreement. There is a 15-year phaseout and I cannot sell my sugar to Mexico, yet they can export sugar to our market.

Within the context of the Free Trade Area of the Americas, what if Brazil and the United States sat down and negotiated an agreement on sugar and citrus? What about CAFTA?
It would not work. This is an issue that has to be resolved at the WTO level. You simply cannot do it bilaterally. If you did that, what about other countries like Australia and the E.U. who have subsidized sugar programs? It would not be fair.