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Monday, July 11, 2005 Good Evening!

First Came NAFTA, Then Came CAFTA and Now it's ThaFTA (07/011/05 11:30)


OMAHA (DTN) -- Trade negotiators from the U.S. and Thailand met in Great Falls, Montana today to discuss a new trade pact between the two countries, and additional Thai access to the already-oversupplied U.S. sugar market has not been excluded from the trade talks.

This, sugar growers say, proves that the Central America Free Trade Agreement (CAFTA) is already setting a precedent that could drive them out of business.

"First came NAFTA, then came CAFTA, and now we're looking at a ThaFTA (Thailand Free Trade Agreement)," said Montana sugarbeet farmer Don Steinbeisser. "We said nearly two years ago that by including sugar in CAFTA, the Administration was opening the flood gate to unneeded sugar from around the globe. Given this week's ThaFTA talks, I hate to say we told you so, but we told you so."

Companies and associations representing every sugar farmer and worker in America sent a letter to White House today asking that sugar be handled at the WTO negotiating table, where trade-distorting subsidies can be addressed, instead of in piecemeal trade agreements with Thailand or other countries.

But during earlier CAFTA hearings, Administration officials made clear that they would not exclude sugar from future trade deals. Kent Wimmer, a director of shareholder administration for the farmer-owned Western Sugar Cooperative, objected to Thailand receiving additional sugar market access beyond its current duty-free quota.

Thailand is one of 41 countries from which America currently purchases sugar.

"The Thai sugar industry is supported by huge subsidies, extensive governmental intervention, and low labor standards, giving them an unfair advantage over efficient U.S. farmers," Wimmer said. "A ThaFTA agreement that included sugar would put subsidized Thai producers ahead of U.S. farmers for access to our own market."

In addition to strictly regulating sugar sales and prices, the Thai government paid sugar growers $412 million in subsidies between 1999 and 2003. U.S. sugar farmers also note that environment and labor regulations in Thailand are lax, with sugar cane harvesters earning as little as 10 cents a day.

These practices, Steinbeisser said, helped Thailand become the world's second largest sugar exporter.

Thailand exported 4.8 million tons of sugar last year, about two-thirds of their total production.

"If CAFTA passes, this Thai agreement will be the next step on the path to bankruptcy," explained Steinbeisser. "The thought of a Thailand agreement that includes sugar is frightening. It's even more frightening when you consider that there are 20 other sugar exporters lined up behind them for the same sweetheart deal."