A sugar deal cut between Canada and the United States guarantees limited access to the U.S. for sugar refined at the beet plant in Taber, Alta., but it comes at the expense of Canadian companies that produce sugar-containing products.
The Rogers Sugar plant has been guaranteed most of the U.S. import market for refined sugar. In return, American manufacturers of sugar-containing products will be able to continue shipping products north under a program that violates the North American Free Trade Agreement.
As well, the Taber sugar beet plant has to accept an export cap far lower than export levels before 1995, when the U.S. reduced imports.
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The Canadian sugar industry grudgingly accepted the Aug. 29 deal as the best possible, although it complained the Liberal government might have won a better deal had it hauled the Americans before a trade dispute panel last year.
“Under the circumstances, it’s the best we could get but it’s a long way from the access that we had prior to 1995,” said Sandra Marsden, president of the Toronto-based Canadian Sugar Institute.
Added Doug Emek, general manager of the Rogers refinery in Taber: “It’s better than we have had in the past couple of years but it is nowhere near what we would have liked to have seen.”
At the core of the deal announced Aug. 29 was an American agreement to guarantee the Taber plant be allowed to ship 10,300 tonnes of beet sugar into the U.S. each year, plus the ability to compete with refined sugar exporters from other countries for the remaining 7,500 tonnes of import quota.
It represents 10 percent of Taber’s 100,000 tonnes of production and less than seven percent of the plant’s production when it increases to 150,000 tonnes of capacity in 1999.
Under the deal, Canadian sugar-containing products manufacturers can ship 59,250 tonnes of their cookies, biscuits, candy bars, sugary drinks and other products south.
In return, Canada withdrew a threat to challenge the U.S. sugar re-export program that allows American companies to import cheap foreign raw sugar and bypass U.S. import restrictions if the sugar is processed into product and then exported into Canada.
Jobs lost at home
Canadian food manufacturers say the cheap American products flooding north take market share and displace thousands of Canadian jobs.
Under the NAFTA, the U.S. sugar export program was supposed to be eliminated by 1995. Canada granted extensions, dragged its feet in challenging the trade agreement violation and finally left it too late to go to a time-consuming trade disputes panel.
According to Canadian government officials, the latest sugar deal was a victory.
Agriculture minister Lyle Vanclief compared the access levels favorably with what was shipped in the years since 1995. They are double, he said.
Sugar industry officials preferred to think of pre-1995 levels and what might have been.
Emek said Rogers used to sell 30,000 to 40,000 tonnes of refined beet sugar in the U.S. Now, it will be one-quarter of historic volumes.
Marsden predicted American sales of sugar-containing products into Canada under the American re-export program will grow while Canada’s sales south are capped.
She said the only solution is a challenge of U.S. import restrictions before the World Trade Organization.
