Vitter Statement Against CAFTA

(Washington, D.C.)U.S. Sen. David Vitter made the following statement on the Senate floor today in opposition to the Central American Free Trade Agreement (CAFTA).

            “Mr. President, I rise today in opposition to S. 1307, the bill to implement the Dominican Republic-Central America Free Trade Agreement.

            “CAFTA will greatly harm Louisiana’s sugarcane industry. Because of the great disruption in our domestic sugar market that this agreement would cause, I have been actively opposing this agreement since it was signed. 

            “CAFTA is a raw deal for the Louisiana sugarcane industry.

            “This agreement would allow an additional 122,000 tons of imported sugar into the United States in its first year alone, with annual increases following. These increases in imports threaten to flood the U.S. market and devastate the Louisiana sugarcane industry as domestic sugar is displaced by highly-subsidized foreign imports. Our sugar program is designed to limit imports to help counter unfair trade actions. These limits help mitigate the ill effects of dumping by other nations. Unlike programs for many other farm commodities, the U.S. sugar program provides no cash payments and operates at no cost to the U.S. taxpayer, as mandated by the Farm Bill.

            “Even with our existing program of import controls, the United States still stands as the fourth largest net sugar importer in the world, importing 15 percent of our sugar consumption every year. Allowing more imports from select CAFTA trading partners brings a potential to flood the market and displace even more domestic sugar. CAFTA could set the stage for future bilateral agreements focused on the largest sugar-producing nations. And, these impacts are compounded with other pending changes, like the NAFTA-mandated change that will allow Mexican sugar complete, open access to the U.S. market after 2008.

            “When Jesuit priests introduced sugarcane to Louisiana in the 1750s, they could not have imagined that sugar would eventually be a $2 billion industry and a vital part of Louisiana’s history and way of life for the next 250 years. It’s this economic and cultural impact – and the thousands of families who rely on sugarcane for their livelihood– that lie behind my decision to oppose CAFTA.

            “The Louisiana Farm Bureau estimates that CAFTA would have cause a $8.5 million reduction in Louisiana’s ag sector, and sugarcane constitutes one of the foundations of this important sector of Louisiana’s economy. Louisiana is home to 27,000 sugar industry jobs, 15 sugar mills, two sugar refineries, and more than 580,000 acres of sugar cane throughout 24 parishes. Louisiana produces 20 percent of our domestic sugar.

            “The Administration made a last-ditch, three-part proposal to the sugar industry to mitigate CAFTA’s impact, but it is untenable. First, they will commit to “hold harmless” the sugar program through the reauthorization of the 2002 Farm Bill. This is something that I could and will support, but it is my understanding that this is already the responsibility of the Secretary of Agriculture under the Farm Bill’s instruction to operate the program at no net cost and its import trigger. I know that sugarcane farmers in my state appreciate the Secretary's commitment to provide short-term relief from the flood sugar import commitments. However, this temporary protection does not help them avoid the flood. We in Louisiana know a lot about floods from hurricanes, but I fear our sugar industry could drown in all these foreign imports.

      “The second component of the deal is the most problematic. If imports threaten to exceed the 1.523 million ton trigger in the Farm Bill, USDA would commit to compensating foreign producers for not selling their sugar within our market. USDA would also establish a pilot program to divert imported sugar into ethanol use, up to the amount coming in under CAFTA. The prospect of paying foreign producers is troublesome. Regardless of the Secretary's statement that he has the authority to implement such a program, there are too many unanswered questions on how this would work. 

            “Do we really want to make cash payments to foreign governments or private foreign corporations in return for a commitment not to export sugar to our market? I think not! Sending our tax dollars to our foreign competition would be an untenable position for a variety of budgetary and policy reasons, making this long-term solution all the more difficult to accept.

            “The ethanol diversion program has its own uncertainties on how it will work, and it seems to signal a desire to purchase foreign sugar for possible ethanol use instead of assisting the domestic industry in developing new markets for our own production—and likely spend significantly more of the taxpayer’s money in the process.

      “Finally, there is a proposal for a feasibility study on converting sugar into ethanol, to be submitted to Congress no later than July 1, 2006.  Well, we already know sugar can be turned into ethanol, because they are doing it in other countries. Worldwide, more ethanol is produced from sucrose than from corn.  We now need to jumpstart our own efforts and implement a program here to provide sugar access to the national renewable fuels program.

            “The Energy Bill we passed this week provides for eight billion gallons per year of renewable fuels, most of which will be ethanol. The new renewable fuels program would amount to more than quadruple the ethanol currently being consumed in the U.S.  So, there is plenty of room to accommodate diverse sources of ethanol, including the minimal access envisioned in the industry's proposal.

            “Access to ethanol was the crux of the sugar industry's proposal to deal with CAFTA—not a study, but real access to the program. They asked for a short term increase in the tax credit during the developmental phase of this program, something that I understand was done for the beginning for the program for corn. With so much uncertainty facing the industry because of NAFTA, CAFTA, and other trade negotiations already in progress, I think this was a fair ask from an efficient domestic industry that has been a robust economic engine for my state for over two centuries. I wish the Administration could have accepted the industry’s ethanol jumpstart proposal instead of proposing merely a two-year, completely uncertain solution.

            “While I served in the House of Representative, I supported and voted for a variety of trade agreements because I sincerely believe that increased trade, when achieved through level playing fields, helps grow the economy and create jobs here in America. I remain committed to the principles of free and fair trade. Other regional and bilateral trade agreements have routinely moved forward without sugar provisions because of the broad understanding that global problems require multilateral solutions. One example is the US-Australia Free Trade Agreement approved last year. Unfortunately, this was not the case with CAFTA.

            “Contrary to what some will say about the sugar industry, they do not believe the solution for the industry is protectionism. America’s sugar farmers oppose CAFTA because they believe that the distortions affecting the global market for this commodity can only be resolved at the World Trade Organization level, with all sugar-producing nations at the table. So let’s be clear. They do not propose protectionist tariffs as far as the eye can see. Rather, they propose fixing the complex system of programs, subsidies, and tariffs in all the sugar producing countries rather than piecemeal in bilateral or regional FTAs. Addressing sugar comprehensively at the WTO level would allow all sugar-producing nations to compete fairly at a global level.

            “Despite disastrous production during the Civil War, a disease epidemic during the 1920s, and freezing temperatures in the 1990s, the Louisiana sugar industry has continued to increase in productivity. But even with the resilience the industry has shown, it may not be able to withstand increased imports from CAFTA and other pending trade agreements.

            “Our sugar farmers and processors work hard and deserve a level playing field to do their jobs and support their families. A CAFTA without distortions to our sugar market—and a concerted effort to address sugar at the WTO—would provide a truly global forum that could alleviate the trade distortions in the world sugar market. And, dealing with sugar trade globally and fairly would help ensure a strong sugar industry in Louisiana and across the nation for years to come.

            “In closing, I want to take this opportunity to thank Chairman Chambliss and Senator Coleman for their efforts to find a solution to the sugar problem with CAFTA. They have been leading a bicameral effort and working diligently to find a workable solution to the sugar issues with CAFTA. While I do not agree with the outcome of those negotiations, I applaud their efforts.

            “Unfortunately, in the end these efforts have failed to produce a workable solution for our vital sugar industry, and, therefore, I remain strongly opposed to CAFTA. I ask all my colleagues to oppose S. 1307.

            “Mr. President, I yield the floor.”

  • Print
  • Email