Managed Trade with Mexico: A Bad Deal
June 9, 2017
This agreement sets a bad precedent for our bilateral trade relationship and moves America's already protectionist sugar policy further away from a free market approach. Not only that, but the suspension agreements enacted a de facto price increase, in defiance of a congressional decision in the 2014 farm bill to leave prices where they were. These rigged prices only benefit Mexican and U.S. sugar producers, while forcing American consumers and food companies to pay the price. We need to fix this in the 2018 farm bill.
Food and Beverage Companies Will Pay the Price
As a result of this agreement, food and beverage manufacturers in Illinois and across the United States will face even higher prices for one of their key inputs. Forced to pay more for sugar because of further government intervention in the market, these Illinois companies will be less competitive than manufacturers in other countries who benefit from lower sugar prices. Congress needs to stand up for American manufacturers and fix sugar policy in the 2018 farm bill.
Floor Prices Higher Than the Farm Bill
The Administration is running roughshod over the 2014 farm bill passed by Congress by making an agreement with Mexico that includes higher price floors than those agreed to in the bill. Congress has the responsibility to stand up for American families, businesses and workers by bringing the floor price down to a reasonable level in the 2018 farm bill, among other reforms we should seek.
Winners and Losers
The agreement amounts to the government picking winners and losers, where American manufacturers and consumers are on the losing end of the deal. The Administration should not be in the business of crafting government policies that amount to nothing more than crony capitalism and unfairly forcing consumers to subsidize not only the U.S. sugar industry, but foreign industries as well. Congress needs to exercise its power and reform the federal sugar program in the 2018 farm bill.
Agreement Will Lead to Even Higher Prices
The original suspension agreements led to a scarcity of sugar, which hurt America's cane refiners and artificially jacked up prices for consumers and companies. The agreement announced today will only lead to further market distortion, driving prices up even higher at a time when U.S. prices are already 80 percent higher than world market prices. Already, U.S. sugar policy costs consumers and businesses roughly $3 billion a year thanks to unnecessary U.S. trade restraints, production limits and a web of other policies that need to be reformed. Congress can do something about this. We need to reform the U.S. sugar program in the 2018 farm bill.
New U.S.-Mexico Trade Restrictions Put Jobs At Risk
The agreement announced today puts even more pressure on employment in the Chicago area. Not only in our community, but in cities and rural areas across the country, there are hundreds of thousands of jobs the industries that use sugar to make their products. When businesses in these industries - the U.S. food, beverage and confectionery sectors - are forced to pay more for sugar, it puts a heavy burden on their bottom line and can lead to layoffs and unemployment. Already, high sugar prices have contributed to the loss of an estimated 123,000 U.S. jobs in these industries over the past two decades. On both sides of the aisle, we need to stand up for American manufacturers, workers and families and reform the sugar program in the 2018 farm bill.