Roney Tells WTO To Address All Facets

Published online: Jun 23, 2004 ASA
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Jack Roney, director of economic and policy analysis for the Washington, DC-based American Sugar Alliance, told members of the World Trade Organization today that there are things the body needs to consider. Roney told the international sugar conference that to rectify the distorted world sugar market, the WTO negotiations must emcompass all countries, both developing and developed and all government subsidies, both direct and indirect. He presented his remarks at F.O. Licht's Seventh European Sugar Conference. He explained that wide price fluctuations make sugar the world's most volatile commodity market and a vast array of government progarms makes sugar the world's most distorted markets. "The so-called world sugar price is really a dump-market price that has for years averaged less than half the world average cost of producing sugar," he explained. He said the world sugar market is just a dumping ground for subsidized surpluses from around the world. Some major exporting countries suggest that the way to remedy word sugar market distortions is to concentrate on changes in traditinal sugar policies in a handful of developed countris. "But this approach," he said, "would miss the vast majority of programs and practices that so badly distort the world sugar market. "Ignoring the developing countries," Roney said, "would mean ignoring three-quarters of the world's sugar production and exports. And concentrating only on traditional, or most transparent, programs--price supports, import tariffs, and direct export subsidies--would mean missing the bulk of the world's sugar distortions. We must also look at the less transparent or indirect types of subsidies that are widespread and pernicious, such as income supports, ethanol programs and indirect export subsidies. Roney said Brazil is the prime example of a developing-country sugar exporter that is trying to deflect attention away from its own sugar subsidies and on to those of several developed countries. "Brazil has played an enormously greater role in depressing the world sugar price than any other country," Roney said. "Brazil's sugar exports have exploded from less than 2 million tons in the early '90s to more than 16 million per year now, and its global market share from less than 4 percent to more than 36 percent. In so doing, Brazil pounded the world sugar market price from 14 cents per pound in the mid-'90s down to 6-7 cents now."