The Free Trade Debate
A. Schmitz and D. Christian.
The US sugar program, which began in 1934, has been largely unaffected by the General Agreement on Tariffs and Trade (GATT), The North American Free Trade Agreement (NAFTA) and the Canada-United States Free Trade Agreement (CUSTA). The sugar program has been the subject of numerous debates. In resolving many of the issues surrounding the US sugar program, it is important to understand why, historically, the sugar program has received strong political support. This support can be attributed to many factors, including the wide geographical dispersion of various components of both the sugar and corn sweetener industries. A strong tie between these two industries also contributes to strong political support.
The US sugar program has been in operation since 1934 with the exception of a few short intervals. Its effects on producers and the general public have been the center of many debates ( Schmitz and Christian, 1993), but these are not discussed here. This chapter outlines the basic elements of the US sugar program and discusses the effects of GATT, NAFTA and CUSTA on the program. Sugar trade between the United States and Canada is becoming a contentious issue. Canada alleges that the US sugar program creates unwelcome trade distortions. Some major factors surrounding this sugar trade dispute are discussed.
Like Canadian supply management, the US sugar program has received strong political support. We show in this chapter some of the reasons why this is the case by developing a regional model of the US sugar program's