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November 9, 2015

Rubio's Reasonableness on Sugar

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It’s a little surprising to see the Wall Street Journal savage Marco Rubio in an editorial (Nov. 5).

Or maybe not. Rubio originally championed something like the Journal’s preferred loose immigration policy, until he got the political stuffings beaten out of him by the consensus of Republican voters.  Apparently the Journal editors would have preferred that Rubio’s candidacy had already been doomed by sticking with an immigration policy strongly disfavored by the voters. Being out-of-step with voters on one of the most intense policy issues is not a path to political success, as Jeb Bush is discovering. But the Journal’s editorial board is apparently still chapped over Rubio’s reality check on immigration, as they can’t help but reveal in the last paragraph of “Rubio and Big Sugar.”

By painting Marco Rubio as a thoughtless panderer to Florida’s sugar interests, the Journal editors do more than a disservice to one of our brightest and most principled presidential candidates—they create a straw man and then blow it over. Rubio has a considered position on the U.S. sugar program, and it’s worth an investment of time to understand it: Rubio wants U.S. sugar subsidies phased out as part of a global trade agreement, rather than unilateral disarmament on the part of the U.S. He believes that a negotiated treaty approach is the better and more sustainable long-term solution.

It’s true that agricultural subsidies cannot be defended on market ideals. But global trade in sugar and other commodities is the furthest thing from an ideal market. In sugar, foreign producers covet the lucrative U.S. market such that they are willing to devote enormous subsidies to driving U.S. producers out-of-business. Most sugar reformers on the Right would do that job for them by removing all supports from domestic sugar producers. But what happens then? With domestic competition eliminated, prices to consumers and candy manufacturers would rise again, not to some kind of ideal, market-determined level, but to whatever extortive level the foreign producers could maintain, absent U.S. competition.

What if, as is true with all other agricultural products, U.S. sugar producers are perfectly capable of competing and winning so long as they are participating in reasonably fair and free global markets? Isn’t that approach worth a try?

The United States is the top consumer market in the world. Whether it’s sugar, or automobiles, or major appliances, or beef, or steel, or anything else, there is a country out there somewhere that would eagerly subsidize their own producers in order to gain the U.S. market and eliminate the U.S. competition. How many of our industries would we lose if we abandoned our negotiated trade approach and simply exposed U.S. producers to the manipulations of the most motivated developing country?

Trade policy is hard, because it forces us to deal with the cold reality of other nations that have their, not our, interests at heart. That’s why U.S. trade policy has for decades consistently taken the approach of using our markets as leverage to extract market-oriented, liberalizing concessions from our trading partners, and to remove our own trade barriers at the very same time. It’s been almost without exception a successful approach, both for us and for our trading partners, and there’s every reason to include sugar policy as part of this successful overall approach.

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