Canada Watching Farm Bill Development

Published online: Sep 14, 2007 staff report
The Canadian sugar industry wants the Canadian government to act over provisions in the U.S. Farm Bill, saying some provisions break American commitments under NAFTA and would restrict Canada-U.S. trade. The Farm Bill has been passed by the U.S. House of Representatives and the Senate will issue its own version of the bill in the fall. The two houses must then negotiate a compromise. "The Canadian sugar industry is watching this process very closely," Canadian Sugar Institute president Sandra Marsden says. "Proposed amendments to U.S. sugar policy will shut down Canadian exports of beet thick juice and restrictive quota administration rules will limit Canadian refined sugar exports to the WTO minimum." Sugarbeet thick juice is an in-process form of sugar eligible to enter the U.S. free of any quantitative restrictions. The Canadians say the U.S. sugar industry has lobbied against thick juice imports and the House version of the Farm Bill contains provisions that would effectively eliminate imports. "This is an international trade restriction disguised as a modification of domestic policy and runs counter to US trade commitments under the NAFTA and WTO," Marsden says. "The restrictions are aimed specifically at Canada, which is the sole exporter of thick juice to the U.S." Marsden says the proposed Farm Bill also restricts imports of refined sugar. Under current regulations, if there is a supply shortage in the U.S., imports of raw and refined sugar can be increased to supply U.S. consumers and food manufacturers. The new Farm Bill would effectively eliminate any refined sugar increase, limiting all future quota increases to raw cane sugar. "These changes, along with an increase in the sugar loan rate and a sugar ethanol program, would make the U.S. sugar program even more trade distorting at a time when all countries are working together to cut trade distorting subsidies and trade barriers through the WTO Doha round negotiations," the institute says in a statement. The Canadian sugar industry wants the Canadian government to oppose the changes in advance of Senate consideration of the Farm Bill.