Sign in Subscribe
International trade

World's Worst Sugar Subsidies Exposed Ahead of WTO Negotiations

Strategic Insights

— 1 min read

The American Sugar Alliance has released a comprehensive handbook, "Dump Market Players," highlighting the world's worst sugar subsidies ahead of next week's World Trade Organization negotiations in Hong Kong. The report, based on studies by independent commodity research firm LMC International Ltd, reveals that prices on the dump market have long hovered at levels barely half the world average cost of producing sugar. American sugar farmers are advocating for global free trade in sugar, requiring the elimination of direct and indirect subsidies provided by developed and developing countries.

Key Takeaways:

  • The dump market has been distorted by trade-distorting policies, including export subsidies in the EU and India, government ownership of sugar industry segments in Mexico, Cuba, and Turkey, and marketing monopolies in Colombia, Guatemala, Thailand, and South Africa.
  • Over 75% of the world's sugar is produced by countries like Brazil, Thailand, and Colombia that exploit loopholes in trade negotiations to avoid policy reforms.
  • The subsidized ethanol program, debt forgiveness, and persistent currency devaluations in Brazil have made it the world's biggest sugar producer and exporter.
  • U.S. farmers, led by Minnesota sugarbeet farmer Steve Williams, demand real reform by the world's major sugar exporters, refusing to accept further concessions until trade-distorting policies are addressed.
  • The WTO negotiations in Hong Kong provide a critical opportunity for trade reform, requiring both developed and developing countries to make commitments and place all trade-distorting policies on the negotiating table.
  • The "Dump Market Players" handbook highlights the need for a level playing field in international trade, where the best businesspeople, not the most subsidized, prosper.

Statistics:

  • Over 75% of the world's sugar is produced by countries that exploit loopholes in trade negotiations to avoid policy reforms.
  • The dump market has been distorted by trade-distorting policies, including:

+ Export subsidies in the EU and India

+ Government ownership of sugar industry segments in Mexico, Cuba, and Turkey

+ Marketing monopolies in Colombia, Guatemala, Thailand, and South Africa

+ State trading enterprises in Australia, Japan, and China

+ The subsidized ethanol program in Brazil

+ Debt forgiveness and persistent currency devaluations in Brazil

Sources:

  • "Dump Market Players" handbook by the American Sugar Alliance
  • U.S. Newswire via COMTEX
  • http://www.sugaralliance.org (electronic copies of the handbook available)

Read more