Sugar Subsidies Could Land India in WTO Hot Water

(Chuck Muth, President, Citizen Outreach) – The global sugar trade is to free markets like sledge hammers are to brain surgery.

While critics of the minor protections afforded sugar producers in the U.S. continue to call for the program’s immediate and total elimination in the name of free markets, the rest of the world’s sugar producers are effectively being allowed to hit from the ladies’ tees by their governments.

But now some of the world’s worst offenders in the sugar subsidy Olympics are turning on each other in a sort of “Lord of the Flies” global meltdown. Consider this June 24 story from the Times of India…

The (Indian) government’s move to extend the export subsidy for sugar until the end of the sugar season in September may increase India’s headache at the World Trade Organization.

Already, several countries, ranging from Australia to Brazil, have raised questions over the subsidy offered by the government as the payment, increases the competitiveness of Indian sugar in the international markets, and impacts prices. Several countries had demanded that the subsidies should be withdrawn. . . .

Privately, commerce department officials concede that the scheme may be against WTO rules but have played along with their political masters. In fact, there were suggestions that the scheme would be discontinued at the end of the current sugar season.

Australia is already on record complaining that India’s subsidies are “the equivalent of 14-16% of the world price” and “threatens to distort trade seriously.”

How can anyone not deeply invested in a candy bar or ice cream biz argue that elimination of the U.S. sugar program would result in a free market while nations such as India, Brazil, Thailand, Australia and especially Mexico continue to pervert the global sugar market with their over-the-top and possibly unlawful welfare-like subsidies?

The solution to this problem isn’t unilateral U.S. disarmament in the Great Sugar Subsidy Wars.

No, the only workable solution that protects the long term interests and security of the United States is the adoption of Rep. Ted Yoho’s global “zero for zero” policy in which our minor protections for domestic sugar producers are eliminated simultaneously with the elimination of government subsidies by other nations.

Including India. Including Brazil.

And especially including Mexico, which has been abusing a loophole in the North American Free Trade Agreement (NAFTA) to dump its government-owned sugar in the U.S. to artificially undercut American farmers and refiners.