Washington, Feb. 8 - The Bush administration on Friday rejected a proposal from U.S. and Mexican sugar producers to limit trade between the two countries now that tariffs have dropped to zero.
The rejection came in the form of a joint statement issued by U.S. Trade Representative Susan Schwab and U.S. Department of Agriculture Secretary Ed Schafer.
The Bush administration, Schwab and Schafer said in the written statement, "cannot support recent sugar policy recommendations and will oppose efforts to implement them through legislation."
It was just more than a week ago that Schafer said he thought it might be a good idea for U.S. and Mexican sugar producers to get together and work out trade policy.
"If that could be done," he said on Jan. 30, "it seems to me like the best way - that producers from two countries can agree on an approach. That's probably better than governments trying to decide how to do it, in my opinion."
U.S. and Mexican sugar tariffs dropped to zero on Jan. 1 after years of slowly decreasing as part of a North American Free Trade Agreement deal.
Unrestricted trade, though, would create chaos, according to Jack Roney, director of economics and policy analysis for the American Sugar Alliance. Rising U.S. exports of high-fructose corn sweetener, or HFCS, to Mexico is displacing sugar there and pushing it into the U.S. market, he said.
Schafer and Schwab agreed, though, that freer trade will be better for all involved: "An integrated sweetener market will be beneficial for the people of our two countries, and producers and consumers can work within the existing policy framework - as all other commodity groups have done - to address any legitimate threat of disruption."