Posted by Todd Zywicki:
Sugar Daddies:
The [1]Washington Post reports on a shameful performance by
Republicans attacking CAFTA at the behest of sugar industry
rent-seekers. Democrats, of course, are largely hopeless on free
trade, but Republicans should know better.
The sugar issue consumed much of the hearing. The industry has been
protected for decades by quotas that limit sugar imports and keep
U.S. sugar prices at more than twice world levels. It enjoys
significant clout partly because large cane-growing companies in
the South shower campaign contributions on politicians of both
parties, but also because beet farmers are widely dispersed and
well organized.
In fact, Central America currently faces competitive disadvantages
against other developing countries:
They also repeatedly raised the specter of China's export
juggernaut, warning that Chinese manufacturers are threatening to
overwhelm their Central American and Dominican competitors. Unless
CAFTA gives America's neighbors permanent, zero-tariff access to
the U.S. market for their clothing exports, apparel companies with
operations in Central America "may well move production to China,"
Allgeier warned, adding that since Central American clothing makers
tend to buy yarn and fabric from the United States, that would cost
U.S. jobs as well.
When I was in Guatemala last month, economists were concerned that
Guatemala would fail to see the light on this issue. For the United
States to punt because of sugar industry rent-seeking would be utterly
shameful.
References
1. http://www.washingtonpost.com/wp-dyn/articles/A51820-2005Apr13.html
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