Senate CAFTA Hearing Focuses on Sugar Issues

Representatives from organizations ranging from the American Farm Bureau Federation to the American Sugar Alliance testified Tuesday to the Senate Agriculture Committee to begin discussing the controversial Central American Free Trade Agreement.

Republican congressional leaders remain split over the agreement, with the sugar industry fueling opposition.

In opening comments from Ag Committee Chairman Saxby Chambliss, he explained that when Congress granted trade-promotion authority to President Bush in 2001, it was understood that agreements would have to be judged on the merits and that some might not pass the Congress. As it currently is written, Chambliss is not ready to vote yes on the agreement.

"This free trade agreement will be perhaps one of the most difficult votes in the 109th Congress and as with all agreements it will have repercussions that we cannot fully predict," Georgian Republican Sen. Chambliss said. "One of my major concerns regarding the agreement rests on the fact that the agriculture provisions, specifically those concerning sugar in this instance, can and likely will seriously impair the operations of the sugar program as passed in the 2002 Farm Bill."

Secretary of Agriculture Mike Johanns and Chief Agriculture Negotiator Allen Johnson explained that this agreement benefits agriculture more than any sector. Johnson outlined the importance of leveling the playing field with increased market access. Johnson also said that sugar is "handled with care."

Jack Roney, director of economics and policy analysis for the American Sugar Alliance, testified that CAFTA is a "fully genuine, life-or-death issue." He added that sugar farmers were insulted when "USTR trivializes the potential harm from this agreement with cutesy, misleading estimates such as the amount of additional access in teaspoons per consumer or production per day."

AFBF President Bob Stallman explains that it was important that sugar be included in the agreement so other crops could not be excluded in this agreement and other future agreements. In Stallman's testimony, he states that the tariff on U.S. sugar is never decreased or eliminated.

"Any sugar that the CAFTA-DR countries would export to the United States above their new sugar quotas would still be subject to a high tariff. This tariff would be set at an amount that would discourage these countries from shipping any additional sugar over their quota to the United States," he said. "Second, the countries involved agreed to a compensation provision that would allow the United States to shut off any additional imports of sugar from this region if those imports are significantly harming our U.S. sugar industry. If activated by the United States, the U.S. government would provide compensation for the lost sugar sales experienced by the CAFTA-DR countries."

The Senate Finance Committee and House Ways and Means Committee has jurisdiction over the agreement. In the House, there is talk about House leadership sponsoring legislation aimed at pressing China to obey trade laws if such a measure would help win passage of CAFTA.

To view more about the comments made at the hearing, visit the Senate Agriculture Committee Web site.