Sweetener Users testify on impact of T.P.P.

by Ron Sterk
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Users say T.P.P. fell short on sugar imports.

WASHINGTON — The Sweetener Users Association (S.U.A.) indicated its support for the Trans-Pacific Partnership (T.P.P.) in testimony before the U.S. International Trade Commission on Jan. 14, but also expressed concern that the sugar provisions of the agreement were lacking.

“S.U.A. members believe the T.P.P. agreement will indeed have positive impacts on the U.S. economy as a whole, and they support its passage,” said Tom Earley, vice-president of Agralytica on behalf of the association. “But those impacts would have been even more impressive if the sugar provisions in the agreement had been commercially significant with respect to market access.

“We appreciate the fact that sugar trade was actually addressed by our negotiators. However, the additional access to the U.S. sugar market offered to T.P.P. partner countries is negligible — a mere 72,000 metric tons in aggregate, well below 1% of domestic consumption — and it does little to liberalize regional trade in sugar. We believe that the United States should be taking a leading role in eliminating protectionist practices that distort world sugar trade.

“One can only conclude that the U.S. sugar program reduced the potential economic gains from the agreement. With the end of free trade with Mexico under the suspension agreements, there is now little, if any net positive economic effect provided by F.T.A.s for sugar consumers or food and beverage manufacturers dependent on sugar as an ingredient.

“The lack of significant additional access to foreign raw sugar for domestic cane sugar refiners is of special concern because these facilities are operating at an unacceptably low level of capacity utilization that threatens their future viability. The looming demise of the Hawaiian sugar cane sector will only worsen the situation of not having enough raw sugar to supply U.S. refineries.”

Alexander & Baldwin Inc., a real estate and agricultural company, in early January said its 36,000-acre Hawaiian Commercial & Sugar Co. Maui sugar cane plantation will be transitioned to a diversified agricultural model after the 2016 harvest, bringing an end to centuries of cane production. All 675 employees will be laid off by the end of the year. Cane area expanded from about 15,000 acres in 1876 to 238,000 acres in 1941 but had declined to 18,700 acres in 2015. According to U.S. Department of Agriculture data, Hawaii was expected to produce 165,000 short tons, raw value, of sugar in 2015-16 (October-September). It was one of only four states, along with Florida, Louisiana and Texas that grow sugar cane.

“Growing demand for foods that are not genetically engineered is also creating additional demand for cane sugar that cannot be met by domestic beet sugar manufacturers,” Mr. Earley said. “In this regard, the role of cane refiners — and the need to keep them adequately supplied — is likely to become even more critical in the years ahead.

“U.S. sugar policies have traditionally limited U.S. cane sugar refiners’ imports of raw sugar, putting refiners at a competitive disadvantage relative to producers of beet sugar. However, the failure of recent F.T.A.s to increase access to the U.S. sugar market – as U.S. consumption has risen – has made the raw sugar supply situation more problematic for refiners.”
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