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(Rep. Raja Krishnamoorthi) – President Joe Biden has made strengthening domestic manufacturing and production a key element of his economic agenda, and I proudly stand with the president in supporting America’s hardworking men and women.

That’s why I voted — along with the overwhelming, bipartisan majority of my colleagues — to maintain the federal program to support U.S. sugar producers.

Like President Biden’s bipartisan infrastructure bill, the bipartisan U.S. Sugar Program is essential in maintaining American jobs.

The American sugar industry provides 142,000 jobs in 22 states, including many beet-sugar farmers across the Midwest.

Like so many other U.S. industries, sugar producers have to compete with cheap imports that have been unfairly subsidized by foreign governments and are often produced under horrific labor conditions, including forced labor and child labor.

In order for American sugar producers to compete with these foreign sources, the U.S. Department of Agriculture limits the amount of imported sugar and offers loans to U.S. sugar processors that must be repaid.

In this way, the U.S. Sugar Program supports American sugar producers at no cost to American taxpayers.

Thanks to this program, approximately 75 percent of the sugar used in American food is actually produced in the United States.

To protect American jobs and to help our domestic industries compete against foreign rivals, I will continue to support programs like the U.S. Sugar Program that help to level the playing field.

Our trade and economic policies must ensure that U.S. jobs and interests come first.

Congressman Krishnamoorthi represents the 8th District of Illinois

(Chuck Muth) – A couple dozen members of the U.S. Senate and House, led by Sens. Jeanne Shaheen (D-NH) and Pat Toomey (R-PA) have raised from the dead a bill to unilaterally eliminate the U.S. sugar program.

The intent is to lift restrictions and open the floodgates to artificially cheap sugar imports from countries that subsidize their home-grown sugar industries – including Brazil, India, Thailand, Russia, Mexico and the European Union.

The irony is Shaheen’s argument that eliminating the U.S. sugar program would “reduce market distortions caused by sugar import quotas” when the fact is the import quotas are necessary because of the market distortions caused by unfair foreign government subsidies.

For his part, Sen. Toomey mischaracterized the U.S. sugar program as a “corporate welfare program” – even though, unlike their foreign competitors, U.S. sugar farmers get NO government subsidies – and claimed the program “jacks up food prices.”

The truth is, the cost of domestic, made-in-the-USA sugar has been remarkably stable for the last three decades under the existing U.S. sugar program while the cost of sweets and treats has gone through the roof.

In fact, it’s not the cost of sugar that’s jacked up food prices; it’s the cost of labor, taxation, government regulations, insurance and, yes, Big Candy profit-taking.

Another inconvenient fact: Eliminating import quotas on foreign sugar from competitors who “cheat” in the international marketplace would wipe out many U.S. family sugar farms.

“The cynically-named Fair Sugar Policy Act is yet another radical attempt to outsource American jobs to foreign countries who heavily subsidize their producers,” the American Sugar Alliance (ASA) said in response to the Shaheen-Toomey bill and a House companion bill sponsored by Reps. Virginia Foxx (R-NC) and Danny Davis (D-IL).

ASA went on to note that the resurrected legislation “comes on the heels of a devastating global pandemic that continues to reaffirm the importance of maintaining strong domestic supply chains for essential products like sugar.”

And if you don’t think the supply chain threat is real, just take a look at all the empty shelves on American retail and grocery stores today for all manner of products thanks to the coronavirus and some of the misguided government responses to it.

There’s simply no reason for making this bad situation worse by eliminating the widely successful, no-cost-to-taxpayers U.S. sugar program.

Citizen Outreach is a free-market grassroots advocacy organization.  For more information, please visit www.CitizenOutreach.org

(Chuck Muth) – COVID surge.  Border crisis.  Rising inflation.  Dropping stock prices.  Middle East flare-ups.  Losing Afghanistan.  Criminal violence in major cities.

You’d think Congress has enough on its plate already without wasting time on…sugar.

But you’d be wrong.

U.S. Sens. Jeanne Shaheen and Pat Toomey, along with Reps. Virginia Foxx and Danny Davis, have resurrected, once again, legislation to scuttle the country’s widely successful sugar program at the behest of Big Candy.

As with many pieces of legislation coming out of Washington, DC, the “Fair Sugar Policy Act” is as misnamed as it is misleading.

What it would do is eliminate limited protections – import quotas and tariffs – for U.S. sugar producers that otherwise would be forced to compete with international sugar producers that are subsidized by their governments, thus giving them an unfair advantage.

“Our bill has historically garnered broad bipartisan support,” Sen. Shaheen declared in her press release reintroducing the bill on July 27^th.

The part she left out, conveniently, is the fact that there’s been even broader bipartisan OPPOSITION by members of Congress for this zombie bill who recognize that free trade also needs to be FAIR trade; meaning restrictions on international competitors who benefit from generous government subsidies.

For his part, Rep. Davis stated that U.S. food processors of sugar-infused products “pay twice as much for domestic sugar than the rest of world.”

Again, that’s because many of the world’s competitors are “cheating” by using government subsidies to artificially deflate the true market cost of their sugar.  It’s akin to selling stolen watches from your overcoat on a street corner.

And that also overlooks the fact that while the cost of candy and other sweets have skyrocketed over the past three decades, the cost of U.S. sugar today has remained mostly stable.

The problem isn’t U.S. sugar policy.  The problem is the market-distorting policies of global competitors.  And there’s nothing “fair” about it.  Congress needs to reject the so-called Fair Sugar Policy Act once again and focus on the far more serious problems facing our nation.

Mr. Muth is president of Citizen Outreach is a free-market grassroots advocacy organization. For more information, please visit www.CitizenOutreach.org

(Chuck Muth) – Green Pool Commodity Specialists – an independent, privately-owned company in Australia which specializes in global sugar market analysis – recently released a study titled, “Indian Sugar: The Impact of Over-production on Sugar Industry Revenues.”

The study found that “Indian Government sugarcane price regulation was causing large production surpluses and India’s subsidised exports had contributed to substantially lower global sugar prices.”

The Green Pool study found that India’s “subsidies on exported sugar of up to one-third of an Indian mill’s cost of production of raw sugar…has had a real and perverse impact on the global market.”

“Indian farmers and millers have no incentive to prevent over-production,” the report explains, “since the government picks up the tab for the difference between the mill’s cost and the lower export price on global markets.”

The report continues…

“Exports of large volumes of subsidised Indian sugar distort global markets…  The effect is that India’s large domestic surpluses are converted to large export tonnages which depress global prices and reduce other producers’ revenues from what they otherwise would have been.”

“Without subsidised exports, domestic prices in India would likely have collapsed, and with it some sugar companies in the sector.  Indian taxpayers and government have propped up the sugar industry through high cane prices, high sugar prices and export subsidies paid to India’s sugar and ethanol sector.”

By comparison, Green Pool notes that Australia’s sugar industry – like that of the United States – “is not subsidised by government.”

The report further observes that India’s price controls and export subsidies are “currently under investigation by the World Trade Organisation (WTO),” and estimates the policies have cost the Australian sugar industry over $1 billion between 2017 and 2021.

“We are hopeful the WTO will find against the Indian subsidies,” said CANEGROWERS Chairman Paul Schembri, “because the economic pain for Australian growers, millers and sugar communities could be profound and prolonged if they continue.”

What he said.  It’s not a free market if foreign competitors are competing with artificial government support.  Which is why the U.S. sugar policy of targeted tariffs and import quotas needs to remain in place until countries such as India zero out their market-distorting subsidies.

(Chuck Muth) – Thailand is one of the world’s biggest sugar producers.  It also heavily subsidizes its sugar industry – to the tune of $1.3 billion a year.  And such market meddling wreaks havoc on its trading partners.  Vietnam is a case in point.

According to a recent Reuters report, Vietnam – as part of a new Asian trade agreement – removed import duties on imported sugar in 2020.  The result, according to an investigation launched by Vietnam last fall…

“(S)ubsidized sugar shipments from Thailand surged 330.4% to 1.3 million tonnes in 2020 and the imports were undermining the domestic sugar industry.”

In response last February, Vietnam imposed temporary anti-dumping levies on imported Thai sugar, which were increased last month to 47.64% and set for five years.  This, according to a report by Celest Koh for Czapp, has resulted in a 31% drop in imported Thai sugar this year so far.

But while the anti-dumping duties appear to have stemmed the flood of cheap, subsidized sugar from Thailand, it’s created another problem:  Vietnam cannot meet the market demand for sugar from its own domestic producers.

As Koh notes, many Vietnamese farmers “have switched to planting pineapples to earn more money.”  As such, Vietnam now needs to import large amounts of sugar from Malaysia and Indonesia.  However, those two countries are unable to provide enough sugar to meet Vietnam’s demand

Which has resulted in an even bigger problem.  More from Koh…

“We’ve seen sugar smuggling via Cambodia accelerate over the last couple of months.  This should continue, given the latest change in the anti-dumping duties.  However, Cambodia’s recent spike in COVID cases means border control is tight at present, making smuggling more of a challenge.”

This is a vicious cycle or actions and reactions that all begin with foreign countries like Thailand meddling in the market by subsidizing their domestic sugar industries and flooding other countries with their artificially cheap product.

And this is why stringent sugar import limitations are included in U.S. sugar policy…and why those limitations need to remain in place until various global sugar producers stop “cheating.”

Citizen Outreach is a free-market grassroots advocacy organization.  For more information, please visit www.CitizenOutreach.org

(Chuck Muth) – Dr. Karim Khan is an Associate Professor at the Pakistan Institute of Development Economics (PIDE) in Islamabad.  And he recently published a column on his government’s sugar subsidies and how they’ve backfired.

Here are some excerpted highlights that every Member of Congress would do well to read and consider in light of ongoing efforts to eliminate U.S. sugar policy as it relates to countries that subsidize their domestic sugar industries…

“Market regulations are exercised to ensure efficiency in production, streamline standard-setting, and provide protection to consumers by ensuring quality products at competitive prices. … Sugar industry in Pakistan is a case of regulatory failure where we have observed frequent instances of hoarding/over-pricing, rents seizing, and political capture, all having significant costs to the society.

“Sugar market in Pakistan is regulated through subsidies, export quotas, import restrictions, and regulations on prices. These regulations notwithstanding, the sugar industry has not been able to ensure competitive prices in the domestic market. …

“If the market were deregulated, competition in the sugarcane market would enable the growers to work out their alternative choices. Likewise, competitive sugar pricing would incentivise the sugar producers to enhance their productive, technical and allocative efficiencies. …

“Given structural inefficiencies in the sugar market, these regulations are not deemed to deliver much as has been the case with the earlier regulations. In other words, being the 7th largest producer in sugar production and 5th largest producer in terms of sugar produced from sugarcane, Pakistan has not been able to be competitive in the global market for sugar and sugarcane.”

Of course, Pakistan isn’t alone.

No domestic industry can compete in a global market where prices are barely half the cost of producing sugar. The answer is to get rid of all the subsidies and all the government distorting policies that have wrecked the global market.

Let prices rise to reflect production costs and create a policy where the best businesses, not the most subsidized, are rewarded.  Zero-for-zero: Zero quotas and tariffs in return for zero subsidies.  That’s the free-market policy Congress should pursue.

(Seton Motley | Less Government) – Unlike the United Nations and World Health Organization, the World Trade Organization (WTO) can and should be an actually useful international entity.

When it’s doing the things it is supposed to be doing.

As America First as I am, I do want US to engage in trade with other nations.  I’d just like US to not get royally rooked when we do.

We want actual free trade.  As in free from government impediments, tariffs – and subsidies.  The latter being the most damaging to global free – and fair – trade.

A country tariffing and limiting imports – damages trade with that country.

A country subsidizing its exports – damages trade with every country.

Because they are artificially undercutting the actual market prices of the subsidized items.

Brazil subsidizes its sugar industry between $2.5 and $4 billion per year.  Which means they can undercut the global market price of sugar – by between $2.5 and $4 billion per year.  Because math.

Shocker: Brazil controls nearly half the global sugar market.  Because math.

Why are we unsure about just how massive Brazil’s massive sugar subsidies are?  Because they are supposed to report them to the WTO – and they are not.

And the WTO isn’t making them – or a whole lot of other nations.

Brazil hasn’t reported its massive subsidy regime since 2018.  Which means for all we know, Brazil has increased its already massive subsidy regime.

The US is right to try to get the WTO caught up on its members’ subsidy reporting. Their WTO colleagues are correct to back the play. We need to mend the WTO – not end it.

There is no other way of which I can think to monitor the global trade cheat landscape.  So that we can then address it.

By Chuck Muth, President, Citizen Outreach

The World Trade Organization’s (WTO) “Committee on Subsidies and Countervailing Measures” (SCM) met for its semi-annual conference on April 27, 2021.

“(The SCM) disciplines the use of subsidies, and it regulates the actions countries can take to counter the effects of subsidies. Under the agreement, a country can use the WTO’s dispute-settlement procedure to seek the withdrawal of the subsidy or the removal of its adverse effects.”

At the meeting, committee chairman Erik Solberg of Norway expressed ongoing irritation with WTO member nations that have not submitted reports “outlining the subsidies they give to their enterprises.”

From the WTO summary of the meeting…

“The chair noted that despite reminders to members to submit their notifications in time, 80 members have still not submitted their 2019 notifications. In addition, 67 members still have not submitted their 2017 subsidy notifications, and 57 have still failed to submit their 2015 notifications.  The chair strongly urged all WTO members to submit their notifications as soon as possible.”

Understandably, it’s difficult – if not impossible – for the SCM to identify which nations may be “cheating” when it comes to government subsidies, including sugar industry subsidies, if those nations refuse to submit their reports on time – if at all.

Two things…

1.)  The widespread failure to submit required reports in timely fashion by so many nations clearly indicates a need for serious WTO reform.

What’s the sense in even having international trade agreements if the parties involved can freely ignore their obligations?

2.)  The current U.S. sugar policy of restricting imports from countries that subsidize their sugar industries needs to remain in place.

If the WTO can’t or won’t protect the interests of American sugar producers, then Congress must.

By Chuck Muth, President, Citizen Outreach

A pair of recent news stories demonstrates the danger to the domestic U.S. sugar market should it be destroyed by allowing unfettered sugar imports from countries that subsidize their own sugar industries.

The Irish Examiner reported last week that “More and more British farmers are giving up the (sugar beet) crop, saying it’s no longer profitable to grow.”

“The sugar beet sector,” added the Financial Times in a separate report, “which produces more than half the sugar consumed in the United Kingdom (UK), has also been hit by pricing pressures in part due to European Union (EU) deregulation four years ago.”

In fact, after the EU deregulated the sugar industry in 2006 and abolished import quotas in 2017, “sugar production ceased in five member states” and “nearly half of the sugar factories in the EU have closed.”

Another problem is crop damage from “virus yellows disease” after the EU banned the use of pesticide seed treatments in 2018, along with “massive frost losses” in France.  The loss of so many of the EU’s domestic producers make it more difficult for the market to rebound after disasters like these.

There have also been “disappointing harvests” in Russia and Thailand.

Such instability in the global sugar market, due to factors beyond the control of Congress, is the reason the current U.S. sugar policy needs to remain in place.

Removing import quotas and tariffs on government-subsidized foreign sugar would decimate the U.S. domestic industry.

If the U.S. sugar industry is destroyed by unilaterally removing the protections for the U.S. sugar farmers and opening the floodgates to cheap, subsidized foreign sugar for a critically important crop, American consumers will pay a big price.

The true win-win solution is for Congress to adopt a “zero-for-zero” policy that would remove the necessary protections afforded the U.S. sugar industry in exchange for simultaneous elimination of foreign sugar subsidies.

That would make the international market not only free, but fair.

By Chuck Muth, President, Citizen Outreach

Gerard Scimeca of Consumer Action for a Strong Economy (CASE) inked a column over the weekend about how the new Biden administration is providing “some measure of hope” for American sugar producers…

“The U.S. sugar industry for years has been hammered by a cascade of unfair trade practices around the globe, with American growers competing against massively subsidized sugar industries in Brazil, India, Thailand, the European Union and elsewhere.”

Mr. Scimeca goes on to note that Katherine Tai, Biden’s new trade representative, is continuing Trump administration calls for reform at the WTO (World Trade Organization) while keeping in place the current “no cost” U.S. sugar policy of targeted tariffs and import quotas on international competitors who subsidize their home-grown sugar industries.

“Sugar would be a powerful test case for the new administration to address with a reformed WTO,” Mr. Scimeca writes.  “That’s because the world sugar market is highly dysfunctional, driven by production and trade distorting practices employed by nearly all sugar-producing countries.”

While noting the current U.S. sugar program “is not the ideal response from a free market perspective,” Mr. Scimeca observes that “the shear breadth of foreign subsidies leaves little choice.”

Nevertheless, some in Congress continue beating the drum for universal disarmament; to eliminate the current sugar policy without preconditions from competitors who “cheat” in the global marketplace.  To which Mr. Scimeca responds…

“Instead, what the administration should do is press meaningful reforms on the WTO and then advocate for a so-called zero-for-zero policy, which would eliminate U.S. sugar quotas – but only in exchange for the end of foreign subsidies across the board. Such reciprocity would allow price to be based on actual costs, not twisted out of shape by government tariffs and subsidies.”

Zero-for-zero is a common-sense approach to a decidedly unfair international market.  Competing nations would have open access to the U.S. market in return for simultaneously agreeing to force its producers to compete on a level playing field.

A win-win for all concerned, including consumers.  Let’s hope the Biden administration continues down this road.