TPP gives Australia more access to U.S. sugar market

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Australia gained more access to the U.S. sugar market.

KANSAS CITY — Australia gained more access to the U.S. sugar market in the Trans-Pacific Partnership that was hammered out in Atlanta over the weekend, but the amount was far less than originally sought, according to news reports. Full text of the 30-chapter trade agreement won’t be available for several weeks.

U.S. negotiators agreed to give Australia an additional 65,000 tonnes per year of export access to the U.S. market, according to a report on Reuters quoting an Australian official familiar with the trade talks. That increases the amount of sugar Australia may export to the United States by 74% from the current Tariff Rate Quota of 87,402 tonnes under World Trade Organization agreements. Through June of this year Australia had exported 62,938 tonnes, or 72%, of its quota for the marketing year that began Oct. 1, 2014, according to U.S. Customs and Border Protection data.

The initial increase is far less than the 500,000 tonnes originally sought by Australia, according to news reports. Australian sources indicated they were not seeking an outright 500,000-tonne base export level but rather a mechanism to allow Australian producers to gain access to future growth in U.S. sugar demand, which appears to be the case of the new agreement at least on the surface.

The American Sugar Alliance, which represents U.S. sugar producers and opposed a significant increase in export access for Australia, said, “The American Sugar Alliance still needs to review the final language and verify details in the Trans-Pacific Partnership, but we are cautiously optimistic about what we’ve learned from U.S. trade negotiators.” 

U.S. sugar users and some refiners had sought a significant increase for Australia in an effort to boost sugar supplies in the United States.

Australia also would get 23% of the discretionary quota, which is based on U.S. demand under the T.R.Q., up from 8% currently, according to the Reuters’ story. In a “best case scenario,” Australia could export up to 400,000 tonnes of sugar to the United States by 2019, the story said.

The Sweetener Users Association said, “Based on the details that have been released, the TPP will provide much-needed additional market access for U.S. sugar imports from Australia. However, we need more sugar than provided by the agreement. While we have gained 65,000 metric tons in additional access, the effect of the 23% additional quota allocation is still largely unknown. What is known is that U.S. users of sugar are facing a shortfall in sugar availability that far exceeds 65,000 metric tons …”

A larger allowance for Australia was considered detrimental to Mexico, also a party in the TPP, which may have seen its suspension agreement quota with the United States slashed significantly. That quota was agreed to Dec. 19, 2014, as a result of antidumping and countervailing duty petitions filed against Mexico by U.S. sugar producers last year. Until the 2014 trade case, Mexico had unlimited, duty free access to the U.S. sugar market since 2008 under the North American Free Trade Agreement. Some Mexican sugar producers recently indicated they may seek an antidumping case against U.S. high-fructose corn syrup producers if Australia was given significantly more access to the U.S. sugar market at the expense of Mexican exports.

Although sugar was a sticking point in the TPP talks, larger issues concerning intellectual property, protection for advanced medicines, automobiles and dairy were key issues later in the negotiations. The U.S. Congress has 90 days to review the agreement, which is expected to encounter considerable opposition within Congress as well as from labor unions, pharmaceutical companies and others, before it can be signed by President Barack Obama.

The New York Times called the TPP “a potentially legacy-making achievement for President Obama.”

The 12 countries included in the TPP account for about 40% of the global economy.
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