September 10, 2019

Gerard Scimeca – Chairman, CASE

Just when we thought the world sugar market could not get any more corrupt. Reuters reports India has announced new rounds of subsidies to prop up its distressed domestic sugar producers, an action other nations are calling illegal by way of a World Trade Organization (WTO) agreement, which they further complain will continue to suppress prices and skew markets.

India’s open flouting of international trade laws is a staggering nose-thumbing to fair trade, and highlights the exact problem U.S. farmers and companies face in a rigged global market where nations flagrantly game the system for an advantage. As CASE has pointed out repeatedly, sugar is the worst example, but it is by no means alone.

Global trade deals are utterly meaningless if cheating is tolerated and nations are allowed to write their own rules and continue to distort markets and corrupt trade agreements. India’s millers are heavily indebted to cane growers, and instead of allowing a market correction that should be the natural occurrence after prolonged mismanagement, India is doubling down on even more subsidies to push mountains of sugar on world markets to achieve a return.

U.S. farmers and consumers suffer from the price fluctuations and supply disruptions that occur regularly in manipulated world markets, and American companies that export are similarly whacked by mercantilist policies designed to restrict free trade. It is a cycle that has to stop, and this kind of wanton outlaw behavior must be the top priority for our trade negotiators and policy makers in Washington going forward.