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September 6, 2015

Sugar Policy

  Tyler Morning Telegraph

The Aug. 26 editorial about U.S. sugar policy was factually incorrect and unfair to an important South Texas industry.

When the maker of Oreo cookies announced it was moving one assembly line from Illinois to Mexico, it said the decision was the result of labor unions, not the price of sugar.

No statement by the company or analysis in the business press identified sugar prices as a factor. In fact, Mexican and U.S. sugar prices are about equal, according to the USDA.

Rather, some bloggers used the Oreo story for political purposes as an excuse to lob criticisms at sugar policy.

What about all the other, non-confectionary companies fleeing Chicago and Illinois for greener pastures?

They’re all leaving, including Oreo, because of the high union labor costs and high taxes of a failing state. Illinois is driving the jobs away.

As for sugar, there’s nothing approaching a free or fair global market. Mexico’s government partially owns its inefficient sugar industry, and the rest is heavily subsidized - as are the sugar industries in Brazil, India, Thailand and other big exporters.

Without these schemes in place that help foreign countries cheat the system, there would be no need for a U.S. sugar policy. The best venue to roll back U.S. sugar protections is the World Trade Organization, where trade negotiators can target subsidies in all counties and eliminate all trade-distorting policies at once.

But unilateral disarmament of U.S. policy, as the editorial suggests, is not a sound strategy. It only rewards Mexico and other bad actors while jeopardizing more U.S. jobs.

Tom Giovanetti

Institute for Policy Innovation 


 

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