Sugar and Free Trade

Today's Miami Herald runs a story on the sugar industry and the prospects for the passage of the Central American Free Trade Agreement (CAFTA). The Herald reports that the U.S. sugar industry opposes CAFTA because CAFTA raises import quotas for importing sugar from Central America by 100,000 tons, or about 10%. These quotas have protected the domestic sugar industry from competition from growers in El Salvador and elsewhere which produce and sell sugar at lower prices than the U.S. growers. The sugar industry is a powerful lobby in Washington.

This story highlights some of the complexities and dilemmas of free trade deals. Even a minor relaxation of sugar import quotas is met with opposition in the U.S., while the U.S. insists that countries like El Salvador lower duties or quotas which protect their own domestic farm products like corn from imports from the highly efficient and subsidized U.S. agricultural sector.

Lower sugar quotas could open markets to allow growers in El Salvador to sell more of their harvest and bring cash into the Salvadoran economy. Yet, at the same time, the sugar cane fields of El Salvador have been highlighted for abusive working conditions including widespread use of child labor. Earlier this year, Human Rights Watch published a study Turning a Blind Eye: Hazardous Child Labor in El Salvador's Sugarcane Cultivation which documents some of these conditions. Similarly, lowered quotas on manufactured goods might bring extra business and jobs to the Salvadoran maquila sector, but those jobs are produced for a factory setting rife with sweatshop conditions and llittle protection for worker rights.

The Miami Herald article quotes an observer who believes that the CAFTA vote will be very close with only a few votes making the difference.