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Free the Sugar!

(Andrew Langer) – As a number of free-market, limited-government, and conservative groups have called for Congress to seriously consider the “Zero for Zero” policy in the global trade for sugar, a South Carolina economist at the College of Charleston confirms the conclusions reached by these organizations.

In late July, Americans for Limited Government released a study by Dr. Mark Hartley from the College of Charleston. Hartley, an economist, studied three of the major actors in the global sugar industry, the US, Mexico, and Brazil. He concluded.

“As proposed, a zero-for-zero sugar policy would lift restrictions and tariffs on trade between all players in the global sugar market and would target market-distorting policies, including direct and indirect subsidies.”

This would benefit businesses and consumers–less government interference means lower prices for businesses and consumers–Dr. Hartley also concluded.

Zero-for-Zero was introduced by Rep. Ted Yoho (R-FL) in a “Sense of the House” Resolution—supported by 8 Republicans and 5 Democrats, “Expressing the sense of Congress that all direct and indirect subsidies that benefit the production or export of sugar by all major sugar producing and consuming countries should be eliminated.”

Dr. Hartley points out in his study that subsidies, and other interference by governments worldwide, lead to huge market distortions that fail to serve either the economies that utilize them or the consumers that live within them—and that Zero-for-Zero (an “untried avenue”) provides a new solution, breaking a stalemate that has stymied the industry.

Conservative and free-market organizations have long-advocated for an end to sugar subsidies—but their advocacy have met with staunch resistance from those who have countered that so long as other nations maintain their market-distorting protectionist policies, the US cannot unilaterally disarm in the sugar trade. Dr. Hartley says:

“Consider that there are more than 100 sugar producing countries worldwide, and there are also basically 100 different sugar policies, each of which includes various forms of government intervention… A free market approach rewards the best and most efficient business people and not the most heavily subsidized producers… [stabilizing] domestic and ultimately world market sugar price … [This] creates free markets, and free markets lead to free and fair markets, and that, in the final analysis, is where world sugar needs to be.”

In releasing the study, Richard Manning from Americans for Limited Government said, “the contentious debate has always centered on how to achieve a true free market ideal, and Dr. Hartley threads that needle in this just released paper. Hartley identifies the ‘zero for zero’ sugar policy model as the ‘true free market approach.’”

(Andrew Langer is President of the Institute for Liberty, an organization long-involved in free-market trade policy.)