(Chuck Muth) – Opponents of the U.S. sugar program of modest tariffs and targeted import restrictions regularly proclaim support for “free market” policies.
But it’s not a free market if competitors are using government subsidies to distort the market and give one side an unfair advantage – as India has now been found doing.
From a Bloomberg report by Bryce Baschuk on Tuesday…
“A World Trade Organization panel ruled that India violated international trade rules when it offered excessive subsidies for the production and export of sugar and sugarcane.
“India’s policies were inconsistent with WTO rules that govern the levels at which nations can subsidize domestic agricultural production, according to a decision posted Tuesday on the WTO’s website. …
“India can appeal the ruling at any point in the next 60 days, a move that would act like a veto because the WTO’s appellate body is not functioning.
“The panel said India violated the WTO agriculture agreement when it provided excessive non-exempt product-specific subsidies to sugarcane producers between 2014 and 2019. The WTO said India must remove its illegal subsidies within 120 days of the adoption of the report.
“The dispute dates back to 2019 when Brazil, Australia and Guatemala filed parallel WTO complaints that alleged the Indian government massively increased its sugar subsidies and reintroduced a minimum price for sugar, which led to increased production of sugar that outstripped domestic demand.
“The nations also contested the legality of India’s decision to assign minimum export quotas for domestic sugar mills and other export incentives that they said distorted world market prices.”
Current U.S. sugar policies are the correct ones. On a level playing field, American sugar producers can compete with anyone of the planet.
The only reform that makes sense – and it’s common sense – is for the U.S. to zero out its trade restrictions only in simultaneous return for governments such as India zeroing out their market-distorting government subsidies.
Zero-for-Zero. Catch it!
Mr. Muth is publisher of Nevada News & Views and president of Citizen Outreach, a free-market grassroots advocacy organization. His opinions are his own.