Robbing Peter to Pay Paul
 Lawmakers looking to give developing-country economies a boost in new legislation have found opposition in an unlikely place: from developing countries.Proposals being considered by Congress to offer poor nations duty-free, quota-free (DFQF) access to the U.S. market would end up penalizing poor countries if they covered sugar, the African Coalition for Trade (ACT) explained in a paper released July 16. “Experience with the reform of the [European Union] sugar regime has proven, however, that including sugar in DFQF initiatives actually does more harm than good to developing countries,” the paper read. “For that reason, the Common Market for Eastern and Southern Africa (COMESA) has recommended that sugar should be excluded from DFQF initiatives. ACT agrees.” These proposals, championed by U.S. food manufacturers and other groups, would undercut lucrative sugar sales for the numerous developing countries that already ship sugar to the U.S. under a quota system. For some developing countries, sugar exports represent as much as 24 percent of total GDP and 93 percent of agricultural revenues. ACT believes tinkering with the current system could leave those countries economically crippled. “Sugar exports are the life’s blood of many of these developing-country quota holders,” ACT wrote. “Literally millions of farmers and workers earn their livings in the sugar industries of these developing-country quota holders.” Under these DFQF proposals, 1.1 million metric tons of additional sugar could flow into the United States. That amount—plus the 1.2 million tons currently entering from Mexico under NAFTA, plus the 1.1 million tons coming from traditional quota holders—equals disaster. U.S. sugar policy would collapse, with prices plummeting to levels lower than world average production costs. “This train wreck would harm current quota holders, LDCs, U.S. farmers, and could wind up costing American taxpayers millions of dollars,” explained ACT president Paul Ryberg, the paper’s author. “It’s not like this is an untested hypothesis,” he added, referring to Europe. Following changes to the EU sugar import policy, the sugar industries of Trinidad & Tobago and St. Kitts & Nevis went out of business. The sugar industries of many other developing countries were severely damaged. According to ACT, granting DFQF for sugar would bestow big benefits on large food manufacturers—which would see artificially low prices—and on large sugar exporters such as Brazil, but not the struggling countries the proposal claims to help. “The outcome would be a classic case of ‘robbing Peter to pay Paul,’” ACT concluded. “Increasing poverty in one group of poor countries in the hopes of reducing poverty in another group of poor countries is not a worthy policy goal.” |
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