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Sweetener users hold out hope for more Australian sugar access

The Sweetener Users Association does not believe that U.S. trade negotiators are firm in their unwillingness to increase market access for Australian sugar within the Trans-Pacific Partnership Free Trade Agreement, even though U.S. officials have said they do not plan such negotiations, a key Sweetener Users official said late last week.

The Sweetener Users Association represents candy companies and other industrial users of sugar.

The United States has long imposed a high tariff on Australian sugar, and when the United States and Australia achieved a free trade agreement, sugar was not included.

At a meeting of the American Sugar Alliance, which represents the sugar growers, in Coeur d’Alene, Idaho, in early August, Sharon Bomer Lauritsen, an assistant U.S. trade representative, said the Obama administration had decided the United States “absolutely” will not negotiate increased market access with Australia, one of the four TPP countries with which the United States already has free trade agreements. She also said the United States will not renegotiate the agreements it already has with Chile, Peru and Singapore.

But at a briefing for reporters Friday, Tom Earley, economist for the Sweetener Users and vice president of Agralytica, an Alexandria, Va., firm, said he believes that the position of sugar market access for Australia is only a negotiating stance.

Earley acknowledged, however, that U.S. negotiators have said “publicly and privately” that they will not negotiate with Australia on sugar.

"They've tattooed it on USTR negotiators’ fingers,” he added. “You just look at them. ‘No sugar from Australia,’ it says right there.”

Bill Reinsch, president of the National Foreign Trade Council, which hosted the event, agreed with Earley, saying that the U.S. negotiators might give Australia access for sugar in order to achieve other goals.

The Australian government has disagreed with the United States on a number of positions in the TPP negotiations, including the issues of state-owned enterprises and intellectual property, Reinsch said, adding that he believed Australia had taken those positions in order to force the United States to negotiate on sugar.

“My theory is that all these are related,” Reinsch said, “If they’re all at risk because won’t let Australian sugar in, it’s a high price to pay.”

When asked if Australia might have reasons other than sugar access for taking certain positions, Earley and Reinsch said they believed sugar access is a key issue for the Australians, but acknowledged they have not talked with Australian officials about their strategy.

A U.S. trade official told The Hagstrom Report today that there had been no change in the position.

“As we've said before, the United States does not intend to negotiate additional market access provisions with current FTA partners with agreements still being implemented,” the official said in an email.

On Saturday, at a news conference at the end of the14th round of TPP negotiations in Leesburg, Va., Australian negotiator Hamish McCormick declined to comment on what U.S. officials have said regarding sugar, but said all TPP countries want to "address any restrictions that apply to their exports and I think that's the basis for which we're trying to move forward,” Reuters reported.

An Australian Embassy spokesperson told The Hagstrom Report today that the Australian government had no comment on the situation beyond McCormick’s statement.

Earley said on Friday that the world sugar market has changed in recent years due to the use of sugar for ethanol production, particularly in Brazil, and that the United States will need sugar from a wider variety of sources.

“There is room for the United States to make concessions [to Australia] on sugar over time,” Earley said, adding that the sweetener users do not expect totally free access for Australian sugar. “We’ll support whatever [the Australians] can extract” from U.S. negotiators, Earley said.

He also said that the sweetener users want Canada to gain more access to the U.S. sugar market, even though Canada produces only a small amount of beet sugar in Alberta and imports 90 percent of its sugar.

Bomer signaled in Coeur d’Alene that sugar might come up in the context of negotiations with Canada, noting that the original 1987 U.S.-Canadian free trade agreement was not comprehensive and did not cover sugar and sugar-containing products.

Canada maintains tariffs on dairy and poultry, she said, while the United States maintains restrictions on sugar-containing products and peanut butter.

Earley also said that the sweetener users push hard in trade negotiations because “we have such an impressive record of failure in getting the domestic program changed.”