Australia’s sugar industry and the Big Candy lobby are as thick as thieves these days, joining forces to harm U.S. farmers, take essential sugar markets away from American allies in poor countries, and undercut existing agreements with Mexico.
Luckily, U.S. trade officials have shown tremendous resolve during Trans-Pacific Partnership talks to not undermine U.S. sugar policy or trade commitments with Mexico. When you consider the following facts about Australian sugar, it’s easy to see why they’ve rejected unreasonable demands:
- Australia already has guaranteed access to the U.S. market that is larger than 36 of the 40 countries with import quotas.
- Australia is the only developed country that ships raw sugar to the U.S. market – something that is normally reserved for developing nations.
- Australia only accounts for 6% of world sugar exports, but America already grants it 8% of our import guarantee.
- Australia’s exorbitant demands for additional market access would require reduced imports from Mexico, which has threatened retaliation against other U.S. agricultural exports as a result.
- Australia failed to achieve additional market access in recent trade talks with Japan and China, which are markets of much greater importance and closer proximity.
- Australia’s sugar industry isn’t exactly Australian. Companies from Singapore, Thailand, China, and Belgium own three-quarters of its sugar milling capacity.
- Australian grocery shoppers pay 40% more for sugar than U.S. consumers.
- Australia played a “substitution” game after it couldn’t produce enough sugar to fill export over-commitments. Since 2009, Australia has imported 455,000 metric tons of subsidized foreign sugar for its own consumption, so it could export its domestic production and fulfill trade contracts.
- Australia’s Queensland Sugar Limited (QSL) operated as a single-desk monopoly that handled all selling – a form of indirect subsidy – prior to 2006. QSL still oversees more than 90% of Australian exports.
- Australian federal and state governments spent nearly $470 million on sugar programs between 2002 and 2007 – a period over which U.S. sugar policy operated at zero cost to taxpayers. Not quite as “subsidy-free” as Australia claims.
- Australian sugar growers are lobbying for a host of new government goodies, including income supports, drought relief, tax breaks, subsidies to offset inputs, ethanol programs, and “innovative farming practice” subsidies.
In sum: Substantial quantities of Australia’s often subsidized and Asian-owned sugar are already flowing into the U.S. market. The U.S. shouldn’t accept excessive demands – which would throw no-cost U.S. sugar policy into chaos and harm other trading partners – just because Australia is desperate to rectify its negotiators’ failure to secure additional market access in recent deals with China and Japan.