CAFTA

[quote]JustTheFacts wrote:

Scott
Yes, CAFTA does have to adhere to the Codex guidelines - shout it from the rooftops.

I’m assuming all the gung-ho Republicans knew that about CAFTA… right?

Scott, your officially a liberal democrat for bringing that up (even if your not) - this is after all, a partisan issue[/quote]

JTF,

Why are you assuming the repubs knew about this? You think the democrats are the party of personal freedoms e.g. freedom to take what supps you want?

Liberal democrats are all socialists, and if you think socialists are in favor of personal freedoms, think again.

It is sad that the republicans (not on this board so much where there are real conservatives and people who respect personal freedoms) do not seem to be much better in many ways.

[quote]ScottL wrote:
JustTheFacts wrote:

Scott
Yes, CAFTA does have to adhere to the Codex guidelines - shout it from the rooftops.

I’m assuming all the gung-ho Republicans knew that about CAFTA… right?

Scott, your officially a liberal democrat for bringing that up (even if your not) - this is after all, a partisan issue

JTF,

Why are you assuming the repubs knew about this? You think the democrats are the party of personal freedoms e.g. freedom to take what supps you want?

Liberal democrats are all socialists, and if you think socialists are in favor of personal freedoms, think again.

It is sad that the republicans (not on this board so much where there are real conservatives and people who respect personal freedoms) do not seem to be much better in many ways.[/quote]

I was just being sarcastic - the only reason the dems do anything at all is because the average citizen is looking to them as the antithesis to the republican train wreck.

The republicans on here think everyone is arguing from the liberal democrat side, I’ve heard very few people in here call themselves a true democrat. Many of us just see the reality that the US is in a serious heap of trouble and couldn’t give two shits about party loyalty.

The dems have no choice to but to take the opposing side because they’re getting deluged by angry, fed up people who want them to step up and do something - anything. The only thing they seem to be doing is delaying the revolution.

This issue should not be looked at as what the republicans or democrats are doing. This is another one like the supreme court fiasco where we as people of a free America need to stand together as one party against this horrible plan. Yes this does tie in directly with codex and the dismantling of our supplement industry.

Check this out to get a better perspective as far as the relation of CAFTA to CODEX:
DANGERS OF CODEX, WTO AND CAFTA!

This new film by Kevin P. Miller exposes imminent dangers posed by CAFTA, Codex, and the WTO, and urges people to action. A new documentary by International award-winning filmmaker Kevin P. Miller, “We Become Silent” has taken the world by storm via the Internet - with more than 10,000 viewings in less than two days. It can be seen at http://en.groundspring.org/EmailNow/pub.php?module=URLTracker&cmd=track&j=35603333&u=322801.

International award-winning filmmaker Kevin P. Miller announced the release of a new documentary about the threat to freedom of choice in health care. ‘We Become Silent: The Last Days of Health Freedom’ details the ongoing attempts by multinational pharmaceutical interests and giant food companies - through the Central American Free Trade Agreement (CAFTA), Codex Alimentarius, the European Union, the WTO, and others - to limit the public’s access to herbs, vitamins and other therapies.

“We Become Silent” is narrated by Dame Judi Dench, one of Britain’s most distinguished actresses.

“I am releasing a 30 minute version of “We Become Silent” because it is vital to engage the worldwide public about the dangers of CAFTA, the EU Food Supplements Directive, the WTO, and the Codex Alimentarius Commission, which is meeting in Italy,” said Miller. “If we don’t stand up to Congress, the unelected bureaucrats serving on these trade commissions, and governments everywhere, our freedoms will be lost. It is now up to Congress to stop CAFTA from becoming law. If we do not act together - immediately - we will see a restrictive European Union-styled multi-government unveiled in our hemisphere.” [Note: the Senate approved CAFTA while the House has yet to vote].

“We Become Silent” features two Congressman who have a philosophical divide on free trade, but agree entirely on the dangers of CAFTA, the WTO, and Codex. Rep. Peter DeFazio (D-OR) and Rep. Ron Paul (R-TX) speak powerfully in the film about how Americans are lured with false promises of free trade as “good for democracy.” In fact, say the Congressmen, sovereign rights are being usurped by these secretive trade bodies, and the only beneficiaries have been multinational corporate interests. They tell a frightening story of how America has become answerable to the WTO and how health freedoms and personal sovereignty are being crushed under the weight of multinational corporate greed.

“We Become Silent” also highlights actor Mel Gibson, in addition to the only known video from inside a Codex meeting. It also shows exclusive interviews with delegates to the Codex Alimentarius Commission, U.S. Food and Drug Administration officials, and many of the best-known health freedom advocates from around the world. This film is a powerful statement about the dominance of multinational corporations over personal freedoms - and the challenges consumers face in trying to repel these monoliths from their daily lives.

“We Become Silent” will air in the USA on WorldLink Television (25 million US homes) and Mr. Miller is aggressively courting UK, Canadian and European TV networks as well.

More than 10,000 people have viewed the film - in its’ first two days on the Internet - at http://en.groundspring.org/EmailNow/pub.php?module=URLTracker&cmd=track&j=35603333&u=322802

Contact:
Kevin Miller
Well TV
http://en.groundspring.org/EmailNow/pub.php?module=URLTracker&cmd=track&j=35603333&u=322803
440-871-9982

Just bumping this so maybe some more people will take a look

I don’t know about all this CODEX stuff. It seems alarmist to me, and the only stuff I could find on it was from some tinfoil-hat-type sites.

Anyway, here’s some good arguments concerning the economics:

CAFTA Deserves To Pass

By Sebastian Mallaby

Monday, July 25, 2005; Page A19

This week the administration aims to jam the Central American Free Trade Agreement through the House, having already secured Senate passage. Rep. Sherrod Brown, the Democrats’ chief CAFTA blocker, has stated his party’s ground for resistance, including in a Post op-ed on May 31. CAFTA would be the most important trade deal since the Bush administration took office, so it’s worth considering Brown’s arguments.

In his Post piece, Brown begins by questioning assertions that free-trade deals would boost U.S. prosperity. “An annual U.S. trade deficit that has gone from $38 billion to $617 billion in a dozen years makes those claims hard to believe,” he wrote.

This is a digression, as every wavering House member should recognize. The purpose of free trade is partly to reduce prices for consumers and partly to force companies to compete with foreign ones; this pushes them to specialize in what they’re best at, driving up productivity and, hence, incomes.

What happens to the trade balance is a different matter entirely. If a country saves the proceeds from trade, it will be producing more but not buying more: As some of those extra products go abroad, trade will move toward surplus. But if a country spends the extra income and then borrows a bunch more, as has happened in the United States, its extra output will be swamped by its extra consumption, including consumption of imports. Trade will move toward a deficit.

Just think of your own finances. Free trade is like a pay raise: You’d be nuts to refuse it. But if you splurge on a vacation or an addition for your home, you may still find yourself in deficit.

Next, Brown says that trade rhetoric rings hollow because “since Congress passed President Bush’s trade promotion authority three years ago, we have lost one-sixth of our manufacturing jobs.”

Actually, data from the Bureau of Labor Statistics show that manufacturing employment has fallen by 9 percent, not Brown’s 16 percent, since the passage of trade promotion authority in December 2001. But the main point that Brown is missing is that total private-sector employment has gone up. The loss of manufacturing jobs has been outweighed by the creation of other types of jobs.

In any case, the disappearance of manufacturing jobs isn’t mainly a reflection of trade deals that drive factories abroad. Most factories are staying here: U.S. manufacturing output is at an all-time high, having jumped 64 percent since 1990. The reason jobs are vanishing is that technology boosts productivity, so a smaller workforce can do more.

And to the extent that manufacturing is based abroad, the boogeyman of low-wage developing countries is not the only factor. The U.S. manufacturing deficit is split roughly equally between high-wage countries (led by Japan and Germany) and low-wage ones (overwhelmingly, China).

Brown also claims that trade with Central America has no allure because the region is too poor to buy U.S. products. True, the boost to U.S. exports won’t be huge; reinvigorating the stalled talks at the World Trade Organization would have vastly more impact. The United States exports less to the CAFTA countries (the five in Central America plus the Dominican Republic) than to France, but a bit more than to Italy. Still, the American Farm Bureau estimates that CAFTA will expand U.S. farm exports by $1.5 billion annually.

Finally, Brown suggests that ordinary Central Americans oppose the CAFTA deal, which has been thrust on them by business. It’s true that anti-CAFTA protesters have come out into the streets in Guatemala, El Salvador and Costa Rica, but the passion of a few thousand people should not be mistaken for the will of the majority. Brown should acknowledge that the region’s leaders, all democratically elected, unanimously support the deal; that they consulted civil society groups before and during the talks; and that they have visited the United States to urge CAFTA’s ratification. Two of the three countries that have ratified the deal so far have done so with overwhelming majorities. Guatemala’s Congress voted in favor of CAFTA, 126 to 12. In Honduras, 100 of 128 legislators approved it.

None of which is to pretend that the CAFTA deal is perfect. U.S. sugar barons have preserved their cherished quotas almost totally intact, protecting their profits at the expense of Central American exporters and American consumers (but the barons are still lobbying against the deal anyway). Big Pharma has pushed for limits on Central American access to generic drugs, lending credence to the claim that trade deals are a corporate plot against consumers.

But, for all its flaws, CAFTA deserves to pass the House. A University of Michigan study found that it would increase U.S. gross domestic product by a modest 0.2 percent and boost Central America’s by a substantial 4.4 percent. The study also found that CAFTA would create nearly 300,000 new jobs in Central America in textiles, apparel and footwear. How can Democrats who care about workers possibly vote against this?

I don’t know BB. You’ve always seemed like a rational, intelligent guy but missing the point on this one seems a bit off. Alarmist, tin foil?

Are you kidding me. I know you et al love dubya for his incredible leadership display but just because the white house is backing this crap doesn’t mean all you republicans need to follow suit on this one. I can under stand all the fat, old business men that can’t see their dicks anymore and only care about more money and power but come on BB you may be a wealthy republican but you’re still a T-Man from what I’ve seen.

The bottom line on the CAFTA and how this related to CODEX is that even though we have the DSHEA to protect us right now, if the CAFTA passes then the treaty law supercedes that and makes us subject to CODEX. Which means that our supplements are subject to attack.

How would you like having to get a prescription for your Surge?

Hopefully one can forego the usual tin foil hat remarks and actually use the grey matter for one second to realize that there is a huge greedy machine behind big pharma and has been for quite a while now. Were it not for the single largest mail in campagin in US history to get DSHEA passed back in the 90’s, we’d be facing this problem already.

To just dismiss this as alarmist is to make the mistake of allowing history to repeat itself. To paraphrase–Evil can be allowed to pass when honest men stand by and do nothing.

storey,

There have been ideas floating around for a long time that these trade agreements are somehow going to impinge on our national sovereignty – the same was said about the WTO, NAFTA et al.

And I’m open to the idea that the agreements do make demands that compel our government to either comply or face the consequences in the agreements.

However, it’s in the enforcement mechanisms that I find information that makes it difficult for me to take this stuff seriously. To my understanding, the biggest penalties that can be levied against us if we don’t comply with this or that provision of these trade agreements is that, if some arbitration court rules we are in fact in violation, then the country that is making the complaint can impose retaliatory tarriffs in the amount of its complaint – which it was perfectly well entitled to do if we weren’t both parties to the trade agreement.

So, worst case, a country can levy the tariffs it could have levied anyway if we weren’t signatories to the agreement. I suppose you could say that the fact that we can’t levy protectionist tariffs except according to the agreement would be a loss of sovereignty, except that we can, and then the other country would file a grievance and go through the above procedure.

All in all, I’m not worried, unless there are enforcement mechanisms I don’t know about.

If I were you, I’d be a lot more worried about the United States Supreme Court opinions that hold that foreign laws are somehow good persuasive authority as to the meaning of our Constitution, as they have done in some recent death penalty cases.

storey,

Also, could you point me to any mainstream sources, or articles by trade reps or lawyers or some similar people, that explain how these things would somehow require the U.S. to take action enforcing whatever provision is supposed to ban access to supplements?

I share some of BB’s concerns regarding this.

Codex Alimentarius has done some good work over the years protecting people from bad food, etc. It has not been traditionally evil, however I would rather have these issues controlled in the United States rather than internationally.

How would their rules be enforced in the United States?

Where is Codex on CAFTA? Does it only apply to import export or is it for everything?

Too many supplement companies are lying their ass off, but international bueracracy and regulation is rarely a good answer to anything.

I need to see more before I can make a decision. What I see on the internet does not look too credible.

What is going to hurt the Caribean nations more then anything else we could possibly do is the passport requirment coming into effect in 2006.

As of Jan 01, 2006 you will need a passport to travel the the Caribean. Most Americans do not have one and will not get one to travel there.

Mexico and PR asw well as the VI will get a huge pick up in business. Most other Islands will tank big time. Many tour operators are offering to pay for the cost of a passport. Still many will not.

It seems like a small item. I have had on since I was 17. Most will not get one to travel and a lot of the Islands are really going to struggle.

CAFTA and Dietary Supplements
by Rep. Ron Paul, MD
July 19, 2005

The House of Representatives is scheduled to vote on the Central American Free Trade Agreement in the next two weeks, and one little-known provision of the agreement desperately needs to be exposed to public view. CAFTA, like the World Trade Organization, may serve as a forum for restricting or even banning dietary supplements in the U.S.

The Codex Alimentarius Commission, organized by the United Nations in the 1960s, is charged with “harmonizing” food and supplement rules between all nations of the world. Under Codex rules, even basic vitamins and minerals require a doctor’s prescription. The European Union already has adopted Codex-type regulations, regulations that will be in effect across Europe later this year. This raises concerns that the Europeans will challenge our relatively open market for health supplements in a WTO forum. This is hardly far-fetched, as Congress already has cravenly changed our tax laws to comply with a WTO order.

Like WTO, CAFTA increases the possibility that Codex regulations will be imposed on the American public. Section 6 of CAFTA discusses Codex as a regulatory standard for nations that join the agreement. If CAFTA has nothing to do with dietary supplements, as CAFTA supporters claim, why in the world does it specifically mention Codex?

Unquestionably there has been a slow but sustained effort to regulate dietary supplements on an international level. WTO and CAFTA are part of this effort. Passage of CAFTA does not mean your supplements will be outlawed immediately, but it will mean that another international trade body will have a say over whether American supplement regulations meet international standards. And make no mistake about it, those international standards are moving steadily toward the Codex regime and its draconian restrictions on health freedom. So the question is this: Does CAFTA, with its link to Codex, make it more likely or less likely that someday you will need a doctor’s prescription to buy even simple supplements like Vitamin C? The answer is clear. CAFTA means less freedom for you, and more control for bureaucrats who do not answer to American voters.

Pharmaceutical companies have spent billions of dollars trying to get Washington to regulate your dietary supplements like European governments do. So far, that effort has failed in America, in part because of a 1994 law called the Dietary Supplement Health and Education Act. Big Pharma and the medical establishment hate this Act, because it allows consumers some measure of freedom to buy the supplements they want. Americans like this freedom, however - especially the health conscious Baby Boomers.

This is why the drug companies support WTO and CAFTA. They see international trade agreements as a way to do an end run around American law and restrict supplements through international regulations.

The largely government-run health care establishment, including the nominally private pharmaceutical companies, want government to control the dietary supplement industry - so that only they can manufacture and distribute supplements. If that happens, as it already is happening in Europe, the supplements you now take will be available only by prescription and at a much higher cost - if they are available at all. This alone is sufficient reason for Congress to oppose the unconstitutional, sovereignty-destroying CAFTA bill.

Dr. Ron Paul is a Republican member of Congress from Texas.

hedo,

That’s very true. They are really worried about that, and are lobbying to get the same treatment as Mexico (the country to which they fear they will lose the most tourists).

Thanks JTF that is a good start to illustrate what I’m talking about.
Sorry BB, I’ve been swamped at work so I’ll have to try and get a bunch of articles together(I don’t know how you do it so quickly!)

I hope you didn’t take that as a personal attack. I re-read the post and I came off as accusatory–sorry bout that. I just really hope people wake up and rise against this one like we have with other attempts in the past.
I’m sorry but tin foil and such aside. No one can convince me that big pharma is out to help anyone but themselves and their pockets.

BB

My wife is in the travel business. The Islands are looking for a worst case job loss of 190,000 people. Tourism is the leading industry.

Big trouble coming and I don’t think it’s going to help security all that much. Especially for returning Americans.

[quote]storey420 wrote:
Thanks JTF that is a good start to illustrate what I’m talking about.
Sorry BB, I’ve been swamped at work so I’ll have to try and get a bunch of articles together(I don’t know how you do it so quickly!)

I hope you didn’t take that as a personal attack. I re-read the post and I came off as accusatory–sorry bout that. I just really hope people wake up and rise against this one like we have with other attempts in the past.
I’m sorry but tin foil and such aside. No one can convince me that big pharma is out to help anyone but themselves and their pockets. [/quote]

storey,

'Sallright. BTW, my secret is a combination of google, having some other good sources, and a decent memory when I’ve seen something applicable previously – that and a slight perception bias because no one remembers (because they don’t know) when I looked for something and couldn’t find it and thus didn’t post. =-)

Anyway, here are a couple of things I found that seem to lay out concerns about Codex in a fairly non-hysterical manner. It seems to me they are pretty speculative, and I still don’t see anything that would tell me how these things are going to take on the force of law if Congress doesn’t want to pass a law regulating supplements:

http://ahha.org/codex.htm

http://www.newmediaexplorer.org/sepp/2005/07/04/codex_alimentarius_adopts_vitamin_guidelines.htm

It’s not that I don’t think “Big Pharma” and other corporations aren’t looking out for their own interests – I very much do think that. “Capture theory” is an academic theory that posits that most of the time regulated industries “capture” the regulators because they have a lot more interest in doing so than anyone else does in opposing them (though obviously sometimes industries’ interests are against each other).

It’s just that I don’t see anything in these trade agreements that stops Congress from doing whatever it wants – which I guess means that if you’re worried about your supplements, don’t worry about Codex, worry about Congress.

And JTF, thanks for the article, but I find it hard to take Ron Paul seriously, especially when he’s tries to pull in Congress’ decision to change the tax laws as evidence that somehow we’ll be forced to do things under CAFTA – the only thing Congress was attempting to avoid was a retaliatory tarriff by the EU. Besides, that was a good change to some bad tax law anyway…

This isnt from a Dem, in fact this is from someone who is unabashedly pro trade.

"Former British Prime Minister Margaret Thatcher said, “First, you win the debate, then you will win the vote.”

But I don’t think the Administration has accomplished that with regard to the Central American Free Trade Agreement (CAFTA). I’ve raised several concerns about CAFTA. So far, I haven’t received a lot of good answers.

Trade is being oversold. If I were to vote on CAFTA today, I would vote no.

I believe in trade. I want to vote in favor of CAFTA. But I have serious concerns that fall into three areas:

Immigration

The Administration has said that nothing in this agreement will affect U.S. immigration laws or force us to issue worker visas to foreign workers on foreign contracts. But I am more worried about what isn’t written in the contract. Why didn’t we explicitly include language in the CAFTA agreement that protected our immigration laws?

Right now, CAFTA allows international companies to take the United States to a trade tribunal if they believe the United States is creating “unnecessary barriers to trade in services.” So, preventing a company from bringing in foreign workers could prompt a foreign company to file a trade dispute claim against the United States. By the way, that tribunal will have two foreign representatives and only one U.S. representative.

This is no longer a hypothetical debate. Please read “Chinese Labor For Oil Drilling Eyed in Colo.” A Canadian firm, apparently under NAFTA, wants to bring in Chinese labor through Canada to work on oil fields in Colorado.

Sovereignty

Another problem is that we are being forced to change our U.S. laws to comply with these free trade agreements. Does anyone remember just a few months ago, we had to change our corporate FSC-ETI tax laws to comply with a ruling made against the United States by the World Trade Organization? That could happen again under CAFTA in other areas of the law.

In addition, we keep being told that the CAFTA agreement is about lowering tariffs and creating a level playing field for American farmers and manufacturers. If it’s just about lowering tariffs, then why is this agreement 1,073 pages long? Are there other provisions which could cause problems down the road?

Re-opening the Farm Bill

CAFTA basically reopens the Farm Bill by breaking a deal the U.S. government made with sugar farmers a few years ago. Here in the midwest, a deal is a deal and a bargain is a bargain. But CAFTA would change the deal the U.S. government made with sugar farmers. If that happens, which commodity group will be next? Believe me, I would be screaming at the top of my lungs if they were doing the same thing to dairy farmers or pork producers.

I don’t have a lot of sugar beet growers in my district, but those I do know are just regular folk. They are not the big, bad sugar farmers they are being made out to be. Many have mortgaged their farms to invest in sugar refinery co-ops. They are scared to death that they will lose their farms because of CAFTA.

Please remember sugar is a $2 billion industry for Minnesota. More than 30,000 families depend on this industry for their livelihood."

From where I stand, this isnt going to pass. Leadership is goign to be twisting a ton of arms to get this done and the vote might be a dubious one just like the medicare one, but I dont know if its going to pass. Especially wtih the 48 hour countdown already ticking away.

biltrite –

Good to see you back and posting again.

Now, sorry to have to disagree with you, but I’m going to on your second two points (I don’t know anything about the first).

On your second point, no one made Congress pass anything. They chose to modify the tax law – and it was modification of BAD tax law – in order to avoid the retaliatory tarriffs that the WTO ruling authorized the EU to enact.

However, don’t forget that without the WTO agreement, the EU could enact whatever tarriffs it wanted to enact – in fact, it still can. But the key to the agreement is that it is a mechanism to avoid those tarriffs and “trade wars.”

The fact that we chose to avoid the tarriff is not the equivalent of the WTO ordering us to do something and overpowering our sovereignty.

On your third point, the sugar farmers are one of the biggest special interest groups out there. They get a buttload of special freebies from Uncle Sugar, and unfortunately they managed to keep most of them, from what I understand, even in the CAFTA treaty. Those subsidies are akin to taxing consumers and handing the money to the sugar farmers – and they know it. Perhaps that’s why they employ more lobbyists than any other industry that is a beneficiary of agricultural subsidies. We should end the entirety of our supports for the sugar producers now.

Here’s a nice article on sugar subsidies:

Sugar Daddies
How sugar interests rip off America and harm the national interest

JASON LEE STEORTS

In a hall of fame for corporate-welfare queens, the sugar industry would occupy a place of special honor. For decades, powerful sugar growers have gotten politicians to enrich them with a protectionist scheme that inflates domestic sugar prices to the detriment of American consumers, American manufacturers, American farmers, and the American economy as a whole. In that congeries of absurdities known as U.S. farm policy, sugar?s sweet deal stands out as perhaps the most damaging and least defensible program. Now, more than ever, it needs to be scrapped.

The program allows sugar processors to take out loans from the USDA by pledging sugar as collateral. The loan rates ? 18 cents per pound for cane sugar, 22.9 cents per pound for beet sugar ? are significantly higher than average world sugar prices. These loans must be repaid within nine months, but processors also have the option of forfeiting their sugar to the government in lieu of repaying their debt.

This arrangement effectively guarantees that the processors receive a price for their sugar that is no lower than the loan value: If prices fell below that level, they would simply forfeit their sugar and keep the government?s money. In order to avoid that scenario, the USDA must prop up the domestic price of sugar. It does this by controlling supply through two mechanisms. First, it sets quotas on how much foreign sugar can be imported without facing prohibitive tariffs; second, it regulates the amount of sugar that domestic processors can sell.

The consequence is that sugar in the U.S. has, over the past decade, cost two to three times the average world price. The sugar industry likes to point out that the program requires no government outlays, since processors repay their loans each year (assuming the government keeps sugar prices sufficiently high). This argument is sound if one regards the sugar program as a question of federal bookkeeping, but that is only because, in this case, the government does an uncharacteristically efficient job of plundering taxpayers to pay off a special interest: It simply cuts itself out as middleman. Each time you buy sugar or a product made with sugar, the difference between the price you pay and the lower price you would pay absent the sugar program?s dirigisme can be thought of as a sugar tax. Unlike most taxes, this tax never finds its way to government accounts. Instead, it passes directly from your pocket to the sugar industry?s profit statements.

A GAO study found that, between 1989 and 1991, the sugar tax cost American consumers an average of $1.4 billion per year. By 1998, that number had risen to $1.9 billion. Other costs are borne by manufacturers who use sugar as an input. Faced with high domestic prices, some confectioners have moved to countries without sugar price supports, such as Canada. Others have simply shut down. A study commissioned by the Sweetener Users Association found that between 7,500 and 10,000 jobs were lost from 1997 to 2003 as a result of high sugar prices. Seven thousand candy-making jobs have been lost in Chicago alone over the past decade. If opportunity costs are taken into account, those numbers certainly underestimate the sugar program?s impact on employment: Without the program, resources currently devoted to sugar production would shift to more efficient sectors of the economy and create new jobs.

The sugar program is a case study in how small, concentrated interests can trump larger but more diffuse ones. By any measure, the U.S. sugar industry is minuscule. It employs only 62,000 people and comprises less than 0.5 percent of U.S. farms. But because it profits so richly from the current protectionist scheme, it has a powerful incentive to keep that scheme in place.

It does so by donating extravagantly to political candidates. One lobbyist who works with trade issues says, ?[The sugar industry] is collecting monopoly rents. Any industry in a position of collecting monopoly rents will spend back a significant portion of those rents to maintain those monopolies.? Although sugar accounts for just 1 percent of U.S. farm receipts, 17 percent of all campaign contributions from the agricultural sector between 1990 and 2004 came from the sugar lobby.

Perhaps no political investment has brought a higher return. The GAO report found that sugar producers gain around $1 billion a year from the artificially high prices that the sugar program guarantees. Some growers have gotten exceedingly rich ? most notably the Fanjul brothers of Florida, who are worth hundreds of millions of dollars, and whose cane-growing company Flo-Sun contributed $573,000 to candidates in the last elections. The Fanjuls befriend politicians with bipartisan pragmatism. Jos? Fanjul donates generously to Republican campaigns; Alfonso is a lifelong Democrat whose clout is so great that Bill Clinton once interrupted a meeting with Monica Lewinsky to take his phone call.

Apart from large cane growers like the Fanjuls and their rival, U.S. Sugar Corp., the sugar lobby is dominated by consortia of sugar-beet farmers in the upper Midwest. Individually, these farmers are small, but they are highly organized and can bring enormous pressure to bear on the politicians who represent them. The single largest sugar donor in the 2004 elections, with total contributions of $851,000, was American Crystal, a sugar-beet cooperative in the Red River Valley of North Dakota and Minnesota.

CONTRA CAFTA
Nowhere does the sugar lobby pursue its interests more ferociously than in debates on free trade. Having successfully lobbied the Bush administration to exclude sugar from the recently ratified free-trade agreement with Australia, sugar producers are now determined to kill the Central American Free Trade Agreement, on which Congress will vote sometime this summer.

CAFTA, which would eliminate most trade barriers between the U.S. and Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and the Dominican Republic, is, if anything, embarrassingly deferential toward the sugar lobby. After its full implementation over a 15-year period, it would allow participating states to increase their sugar exports to the U.S. by only 1.7 percent of current U.S. sugar production. The sugar industry is nevertheless intransigently opposed to the pact, and has rejected every suggested compromise.

If the sugar lobby derails CAFTA, its success will, once again, represent the triumph of the few at the expense of the many. CAFTA would bring modest but not insignificant economic gains to both the U.S. and Central America. Perhaps more important, it would advance efforts to create a Free Trade Area of the Americas, and would strengthen the Central American middle class while making the economic and legal systems of participating states more open and transparent. This, in turn, would shore up democracy in the region at a time when Daniel Ortega has resurged as a destructive force in Nicaragua and the anti-democratic message of Venezuela?s Hugo Ch?vez gains ever-wider currency throughout Latin America.

These advantages notwithstanding, it would be understandable for a legislator to oppose CAFTA in the sincere belief that it would be, on balance, bad for his state. What is remarkable is that the sugar industry has won ?no? votes from legislators whose constituencies would clearly benefit from CAFTA.

Among U.S. states, the top two exporters to the CAFTA region are Florida and Louisiana, at number one and number two, respectively. A study by James A. Richardson of Louisiana State University estimates that, after one year, CAFTA could boost Louisiana?s sales in all industries by $339 million and create 2,769 new jobs. The U.S. Chamber of Commerce predicts that, in the same time, CAFTA would increase Florida?s sales by $985 million and create 7,008 new jobs; after nine years, those numbers would rise to $5.2 billion and 36,982. CAFTA would be widely beneficial not only to manufacturing concerns in Florida and Louisiana, but also to agricultural interests, of which sugar is but a small part. The sugar industry comprises 2.4 percent of Louisiana?s farms and 16.5 percent of its farm income; in Florida, it comprises 0.3 percent of farms and 8.7 percent of farm income. Yet the sugar lobby has somehow overridden all competing interests, with the result that almost no one from the congressional delegations of Louisiana and Florida is supporting CAFTA. (The heroic ? or simply rational? ? exceptions are Reps. Jim McCrery and William Jefferson in Louisiana, and, in Florida, Reps. Katherine Harris, Ileana Ros-Lehtinen, and E. Clay Shaw Jr.)

It is deeply exasperating that a tiny sector on which CAFTA?s effect would be almost negligible is within striking distance of scuttling the agreement. The obstinacy of sugar producers looks especially unreasonable when one considers that protectionism has increased their share of the domestic market from 55 percent in the late 1970s to 89 percent in 2002, and when one notes that population growth over the next decade is likely to increase demand for sugar, thereby offsetting any lost income to the industry.

Seen from another perspective, however, the sugar lobby?s alarm is understandable. Owing to a trade dispute, Mexico does not export as much sugar to the U.S. as is allowed under NAFTA. A resolution of that dispute ? along with the complete elimination in 2008 of tariffs on Mexican sugar imports ? could put U.S. producers under intense pressure from their competitors south of the Rio Grande. And while the sugar provisions in CAFTA might not amount to much, ratification of the pact would set the precedent that sugar is not off the table in future trade negotiations. With the Bush administration moving forward on talks with Thailand, Colombia, and South Africa ? sugar producers all ? the domestic sugar industry is probably right to suspect that the end draws nigh.

What the industry?s instinct for self-preservation will not allow it to acknowledge is that this is precisely as it should be. The United States has no reason to grow sugar, and every reason not to. It is a simple question of comparative advantage, as Dennis Avery, a former agriculture analyst for the Department of State, explains: ?Yields of sugar in the tropics are twice as high and the costs half as high as growing sugar in temperate regions.? The U.S. sugar program thus defies both nature and economics; in guaranteeing an artificially high price for sugar, it encourages American farmers to plant sugar instead of crops they could grow more efficiently. Ending the domestic sugar program would require them to switch to the crops they should have been growing all along.

While liberalizing world farm trade would probably put a stop to domestic sugar production, it would also, according to Avery, mean that U.S. farmers who now grow sugar beets ?could sell wheat to China and India, and make far more money than they do from this sugar.? Cane growers in Florida and Louisiana would have a somewhat harder time of it, since little else could grow on their lands. In the case of the Fanjuls, one is consoled by the thought that they won?t find themselves on welfare rolls any time soon. Smaller farmers could be compensated for their loss, and their transition eased by a gradual phase-out of the sugar program.

The benefits of ending domestic sugar production would not be merely economic; Avery sees liberalized farm trade as ?both the leading environmental issue and the leading trade issue in the world.? Given long-term population trends, countries will have to specialize in crops for which they have a comparative advantage ? or else undertake policies with disastrous environmental consequences. ?We?re headed for a world in which we?re going to feed not 6.3 billion people, but close to 9 billion; and instead of a billion people affording high-quality diets, we?ll probably have 7 billion,? Avery says. ?We?ll need nearly three times as much farm output worldwide. So instead of clearing the world?s remaining 16 million square miles of forest [for agriculture], we need to triple yields on land we?re already using. That means getting higher sugar yields in Brazil, and higher grain and oil-seed yields in the Red River Valley.?

HOW TO LOBBY BACK
No matter what advantages would issue from the elimination of the sugar program, domestic producers will not acquiesce in the removal of their government-mandated profit margins. What is needed, then, is a more effective opposition to the sugar lobby.

While such an opposition would lack the organizational advantage of representing highly concentrated interests, it could exploit the fact that discontent with the sugar program transcends traditional political divides. A coalition to oppose the sugar lobby could draw support from free-trade advocates on the right, manufacturing and agricultural interests that stand to benefit from trade liberalization, and consumer groups that object to high sugar prices. On the left, many environmentalists favor farm-trade liberalization for the reasons discussed above, and are opposed to sugarcane farming in Florida because of the damage it inflicts on the Everglades. Groups concerned with the elimination of global poverty, such as Oxfam, are quick to point out that the U.S. sugar program, along with European export subsidies for sugar-beet growers, depresses world sugar prices and keeps cane-growing tropical nations poorer than they need to be.

As WTO members move toward final agreement on the Doha round of trade-liberalization talks, protectionist schemes for sugar and other crops will grow ever harder to defend. The EU has just announced a plan to cut its sugar subsidies by 39 percent; to the degree that its member states consent in liberalizing their sugar industries, pressure for U.S. reform will increase. Meanwhile, the sugar industry?s opposition to CAFTA has alienated agricultural lobbies traditionally sympathetic to sugar growers. Many such groups suspect that the exemption of sugar from the Australian free-trade agreement resulted in their getting fewer concessions in that pact than they otherwise would have won. John Frydenlund of Citizens Against Government Waste says, ?There always has been a circle-the-wagons attitude in agriculture as far as protecting each other is concerned, but I think this time most of the rest of agriculture is starting to look at the sugar lobby as being off the reservation and out only for themselves.? Such frustration already appears to be influencing politicians. Trent Lott, expressing his annoyance with the sugar industry, recently said, ?I?ve been in the unholy agricultural alliance for 33 years. I?ve voted for every damned ridiculous agricultural program and subsidy conceived by the minds of men. But I may not anymore.?

The real test will come in 2007, when the next farm bill is negotiated. Reformers should seek nothing less than the total dismantling of the sugar program. To achieve that end, they must begin moving public opinion in their favor now. Their case shouldn?t be too hard to make. They can simply ask Americans what reason there is to continue a policy that hurts consumers, costs jobs, harms the environment, sabotages U.S. trade relations ? all to line the pockets of farmers who cannot survive in a competitive market. One suspects a solid majority will reply that there is no good reason at all.

BB

yeah i have been gone awhile…work is busy especially with recess coming after this week.

i am not saying i necessarily agree with that statement on cafta. I do think the immigration provisions are kind of troubling though. the guy that wrote it is a memember of the ag committee, a republican, a free trader, and is in favor or eliiminating farm subsidies, but i take his concerns very seriously.

Here’s the pro-free-trade WSJ editorial-board’s take – in fairness to the immigration concerns, I should point out that the WSJ is essentially for open borders (not officially, but they oppose every enforcement program that has been floated):

Cafta’s Benefits
July 27, 2005; Page A12

The Central American Free Trade Agreement is expected to come up for a vote in the House this evening, and it’s going to be a nail biter. Protectionists are promising electoral revenge against any Member who votes yes, so it’s worth restating the case for this modest step toward greater Western Hemisphere prosperity.

Start simply with the appeal of greater two-way trade: The vast majority of Cafta-made products already enter the U.S. duty-free under the Caribbean Basin Initiative. Cafta opens the way for more U.S. products going south. The agreement also boosts intellectual property protection in Cafta countries, as well as competition in financial and other services in which the U.S. excels. American farmers alone expect to increase exports to Central America by some $1.5 billion a year. All that goes away if Cafta fails.

We are also told that Cafta can’t work because the North American Free Trade Agreement of 1994 didn’t work. And while it’s true that Nafta didn’t cure cancer or turn Mexico into Switzerland, those who argue that Nafta failed are ignoring the evidence.

In Nafta’s first decade, annual two-way trade between the U.S. and Mexico almost tripled, to $232 billion from $81 billion. During that same period the U.S. created 18 million net new jobs and, even after the dot-com implosion and the recession of 2001, the current U.S. jobless rate of 5% is lower than it was (6.4%) when Nafta became law. U.S. productivity and wages have all climbed steadily. Ross Perot’s prediction of a “giant sucking sound” proved to be a fantasy.

But what about “the trade deficit”? Well, the National Association of Manufacturers (NAM) reported last week that, since the birth of Nafta, U.S. exports to Canada and Mexico have grown 55% faster than they have to the rest of the world, while imports from Mexico and Canada have only grown 20% faster. NAM says that Nafta partners make up just 10% of the U.S. trade deficit in manufactured goods.

“Those who cite experience with Nafta as a pretext to oppose the U.S. Central America-Dominican Republic Free Trade Agreement are substituting emotion for reasoned judgment,” says NAM President John Engler (who recently joined the board of Dow Jones, which publishes this newspaper).

Nor have Nafta’s benefits been limited to dollars and cents. When a rebel uprising, two political assassinations and a financial crisis hit Mexico in 1994, Nafta arguably helped to prevent the kind of political lurch to the authoritarian left that has been common in Mexican history. Nafta created economic and political interests in Mexico that had a stake in relations with the U.S. and global integration.

The economic competition induced by Nafta pushed Mexico’s political system forward toward fuller democracy, helping to end 70 years of one-party rule. Compare this progress with isolated Argentina’s reaction to its 2001 financial crisis, which has revived the authoritarian Peronism of the 1970s in Buenos Aires. Given Central America’s own history of authoritarianism, this is no small point for Cafta. Venezuela’s Hugo Chavez will be overjoyed if it fails.

Protectionists are also trotting out another old reliable, the “sovereignty issue,” claiming that U.S. regulatory powers will somehow be ceded to Cafta arbitration panels. But Nafta’s panels have hardly obliterated Congress’s powers, and Cafta’s couldn’t overrule any U.S. health or safety rules. All Cafta does is insist on “non-discriminatory policies,” which means that U.S. laws and regulations must be transparent and can’t be disguised trade barriers. If a Cafta country challenged a U.S. rule and won, the U.S. could refuse to change and the only Cafta recourse would be to deny comparable trade benefits to the U.S.

With so much to recommend Cafta, the shame is that the Bush Administration has had to hold a vote-buying bazaar to pass it. These include the usual courthouses and nominations, but also payoffs for the sugar, textile and cotton industries. If Cafta still loses, we hope the White House is already exploring ways to pay them back with free-trade regulations, among other measures.

Cafta opts for integration over isolation, for building bridges rather than walls. Killing Cafta would signal to the world that America is afraid of competition and in retreat, both commercially and politically. That can’t be good for U.S. workers or consumers, nor for spreading prosperity to the developing world.