Sugar Producer

22 SUGAR PRODUCER | MAY 2022 This June, trade ministers and negotiators from around the globe are scheduled to gather in Switzerland for the World Trade Organization (WTO)'s 12th Ministerial Conference. As the WTO begins its important negotiating efforts, we're hoping that WTO reform will be front and center on the agenda. Why? It's simple: Transparent, fair and disciplined global markets should start at the WTO. And sugar markets are widely considered to be the most volatile Go to the Source Fair global sugar trade? Start at the WTO. FROM THE ASA By Rob Johansson, Director of Economics and Policy Analysis commodity markets, with billions in market-distorting subsidies and policies commonplace around the world. But first, we need real reform to improve the WTO's effectiveness. U.S. sugarcane and sugarbeet family farmers produce a reliable supply of sugar for American households under some of the world's highest safety, labor and environmental standards. They have made huge strides in sustainability by increasing productivity on their fields and improving efficiencies in sugar processing. Yet, despite the efficiency of the American sugar industry, it cannot compete against the billions of dollars in foreign subsidies channeled into the global sugar market. Those subsidies drive down world prices for sugar on the global sugar export market to well below the world-average cost of production. And while current U.S. sugar policy provides a transparent and effective means to counter the negative impacts of America's sugar producers have been working for years toward the verified elimination of global sugar subsidies. depressed global sugar prices on U.S. sugar farmers and workers, America's sugar producers have been working for years toward the verified elimination of global sugar subsidies. To enact meaningful sugar subsidy reform on a global scale, we need to leverage the multilateral structure of the WTO. However, efforts to address the world's distortive sugar market are complicated by dysfunction in today's WTO. To make dismantling unfair trade practices and subsidies an attainable goal, the American Sugar Alliance recently issued a policy statement outlining specific reforms at the WTO to help lay the foundation for a less distorted and more predictable global sugar market. This policy stands on four pillars: 1. Accountability: Impose more rigorous disciplines on the practice of members' self-designation of "developing country" status and the accompanying application of "special and differential" treatment. 2. Modernization: Update the methodology by which countries measure levels of government support. The current methodology is based on commodity prices during an arbitrary three-year period in the 1980s. 3. Transparency: Improve the transparency, timeliness and, importantly, the accuracy of country notifications relating to domestic support and export subsidies. 4. Enforcement: Overhaul the dispute settlement mechanism to ensure that, if necessary, a member's noncompliance with established obligations can be addressed in a timely manner. A recent WTO dispute case, which found the use of subsidies by mega sugar producer and exporter India to be inconsistent with its WTO commitments, starkly underscored the urgent need for reform. Despite the WTO's findings that India vastly exceeded the allowable level of subsidies for its sugarcane producers and also employed WTO-illegal export subsidies, India has vowed to maintain its market-distorting policies as it pursues the WTO appeal process. This is but one glaring illustration of the current dysfunction at the WTO that has hindered real reform in the global sugar market. These reform proposals are also in alignment with the bipartisan Zero-for- Zero approach to eliminating foreign sugar subsidies, which was introduced in Congress last year. Meaningful reform at the WTO, combined with the enactment of Zero- for-Zero, would finally offer U.S. sugar producers an opportunity to complete on a level playing field. n PULLER RINGS FOR SUGARBEET HARVESTERS DEALERS WANTED 4669-1 HCL112.indd 1 4669-1 HCL112.indd 1 2/16/22 12:04 PM 2/16/22 12:04 PM

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