Published On: Sun, Jun 11th, 2017

Sugar lobby groups at odds with Trump administration over new Mexico pact

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A new deal between the U.S. and Mexico on sugar exports may have averted a costly trade war. But it’s also sparked a fierce battle between the Trump administration and some of America’s largest food companies, who claim Tuesday’s agreement will harm their businesses and ratchet up food costs for consumers.

Under the preliminary agreement, Mexico will accept a new minimum price for the sugar it sells to the U.S. and restrict the amount of refined sugar it exports, measures that will maintain high sugar prices for domestic producers.

But while those concessions were immediately celebrated as a victory for the U.S. — and for U.S. sugarcane and sugar beet farmers, in particular — it’s been panned by representatives of the processed food, confectionery and soda industries, who have long fought federal protections of domestic sugar.
Mexican sugar cane workers load a truck in a Nayarit state. (PHOTO: Bloomberg)

Mexican sugar cane workers load a truck in a Nayarit state. (PHOTO: Bloomberg)

The dispute pits some of America’s largest food companies against one of its most powerful agricultural lobbies — and against the Trump administration itself. In doing so, it also exposes a central paradox in President Trump’s aggressive, “America first” trade approach: Any policy that benefits some U.S. firms will also, inevitably, hurt others.

“Today’s announcement is a bad deal for hardworking Americans and exemplifies the worst form of crony capitalism,” said the Coalition for Sugar Reform — which represents Coca-Cola, Nestle, Kraft Heinz and hundreds of other food companies — in an incendiary statement. “U.S. sugar policy should empower America’s food and beverage companies to create more jobs, not put hundreds of thousands of good-paying U.S. jobs at risk just to benefit one small interest group.”

From the food industry’s perspective, this agreement — and the controversial U.S. sugar-support policy that it represents — artificially inflates U.S. sugar prices to points far above the world market. According to the Department of Agriculture’s Economic Research Service, which measures price according to futures contracts, the world price for both raw and refined sugar is lower than the respective U.S. raw and refined sugar prices.

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