NCPA - National Center for Policy Analysis


July 27, 2005

Contrary to Big Sugar's squeals and fears, the Dominican Republic-Central American Free Trade Agreement (DR-CAFTA) does not portend either the demise of the industry or a significant drop in its employment, says Daniella Markheim (Heritage Foundation).

Therefore, Congress and the Administration should:

  • Approve DR-CAFTA now and later address the real sugar problem by eliminating the wasteful price supports, loans and quotas.
  • Delete the sugar program from the next farm bill, or sooner, and abolish tariff-rate quotas on sugar at the WTO meeting in December.

The only fatal flaw in DR-CAFTA, says Markheim, is that it does not go far enough to open the U.S. sugar market to the rigors of international competition.

  • Congress should not sacrifice the best interests and economic gains of almost 297 million Americans to the overblown fears of the 52,000 people employed by the sugar industry.
  • But political unwillingness to apply the rules and principles of free trade across all sectors of the American economy in a fair manner will continue to cost Americans jobs and impose higher supermarket prices on the American consumer.

Ultimately, says Markheim, freeing the U.S. sugar market from costly government intervention and protectionist policies will sweeten the day for American consumers and business.

Source: Daniella Markheim, "DR-CAFTA Yes, Sugar No," Heritage Foundation, Backgrounder No. 1868, July 13, 2005.

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