DOMINICAN REPUBLIC-CENTRAL AMERICA-UNITED STATES FREE TRADE AGREEMENT IMPLEMENTATION ACT -- (Senate - June 30, 2005)
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Mr. VITTER. Mr. President, I rise today in opposition to S. 1307, the bill to implement the Dominican Republic-Central America Free Trade Agreement. I do it for one very clear and specific reason. CAFTA will greatly harm Louisiana's sugarcane industry. It is, quite frankly, a raw deal for Louisiana sugar.
Because of the great disruption in our domestic sugar market that this agreement would cause, I have been actively opposing this agreement since it was signed. This agreement would allow an additional 122,000 tons of imported sugar into the United States in its first year alone, with annual increases following. These steady increases in imports threaten to flood the U.S. market and truly devastate the Louisiana sugarcane industry, as domestic sugar is displaced by highly subsidized foreign imports.
Our current sugar program is designed to limit imports to help counter unfair trade actions, and these limits help mitigate the ill effects of dumping by other nations. Unlike programs for many other foreign commodities, it should be noted that this U.S. sugar program provides no cash payments and operates at no cost to the U.S. taxpayers through cash payments as mandated by the farm bill.
Even with that existing program in import controls, the U.S. still stands as the fourth largest net sugar importer in the world, importing 15 percent of our sugar consumption every year. Allowing more imports from select CAFTA trading partners truly brings a potential flood to the market, displacing even more domestic sugar. CAFTA really could set the stage for future bilateral agreements focused on the largest sugar-producing nations, and these impacts are compounded with other pending changes, such as the NAFTA-mandated change that will allow Mexican sugar complete unfettered access to U.S. markets after 2008.
When the Jesuit priests introduced sugarcane to Louisiana in the 1750s, I guess they could not have imagined that sugar would essentially be a $2 billion industry and, much more importantly, even a vital part of Louisiana's history and way of life for over 250 years. It is this economic and even cultural impact and the thousands of families who rely on sugarcane for their livelihood and their way of life which lies behind my decision to oppose CAFTA.
The Louisiana Farm Bureau estimates CAFTA would have caused an $8.5 million reduction in Louisiana's agricultural sector, and sugarcane constitutes one of the foundations of this important sector of Louisiana's overall economy.
Louisiana is home to 27,000 sugar industry jobs, 15 sugar mills, 2 sugar refineries, and more than 580,000 acres of sugarcane throughout 24 parishes. All told, Louisiana alone produces 20 percent of all of our domestic sugar.
As I said, this represents an enormous economic impact. But even more importantly, it truly represents a culture and a valued way of life.
The administration made a last-ditch, three-part proposal to the sugar industry to mitigate CAFTA's impact, but I truly believe that it is untenable.
First, they committed to hold harmless the sugar program but only through the reauthorization of the 2002 farm bill. This is something modest, something I could and will support, but it is my understanding that it is already the responsibility of the Secretary of Agriculture, under this farm bill, to operate the program at no net cost and its import trigger.
I know that sugarcane farmers in my State appreciate the Secretary's commitment to provide this short-term relief from a flood of sugar import commitments, but this temporary protection will not help them avoid the flood in the medium and long term. We, in Louisiana, know a lot about hurricanes and floods, and I fear that in the past 2 years, our sugar industries have drowned in this flood of foreign imports.
The second component of the proposed deal from the administration is perhaps the most problematic. If imports threaten to exceed the 1.523-million-ton trigger in the farm bill, the Agriculture Department would commit to compensating foreign producers for not selling their sugar within our market. U.S. tax dollars are going to compensate foreign producers. USDA would also establish a pilot program to divert imported sugar into ethanol use up to the amount coming in under CAFTA.
The prospect of paying foreign producers is very troublesome, perhaps politically untenable. Regardless of the Secretary's statement that he has the authority to implement such a program, there are so many unanswered questions on how it would work and if it would be politically supportable. Do we really want to make cash payments to foreign governments or private foreign corporations in exchange for a commitment not to export sugar to our market? I don't think so. This proposal is expected to cost $200 million a year.
Sending our tax dollars to our foreign competition I think is an untenable position for a variety of budgetary, policy, and political reasons, making this long-term proposed solution untenable.
The ethanol diversion program has its own uncertainties on how it will work, and it seems to signal a desire to purchase foreign sugar for possible ethanol use instead of assisting the domestic industry in developing new markets for our own production and likely spend significant more of the taxpayers' dollars on those foreign sources in the process.
Third, there has been a proposal for a feasibility study on converting sugar into ethanol to be submitted to Congress no later than July 1, 2006. We already know sugar can be turned into ethanol because they are doing just that in other countries.
Worldwide, more ethanol is produced from sucrose than from corn, and we now need to jump start our own efforts and truly implement a program to provide sugar access to the national renewable fuels program.
The Energy bill we passed this week provides for 8 billion gallons per year of renewable fuels, most of which will be ethanol. The new renewable fuels program would amount to more than quadruple the ethanol currently being consumed in the U.S. So there is plenty of room to accommodate diverse sources of ethanol, including a modest room for sugar.
Access to ethanol was the crux of the sugar industry's proposal to deal with CAFTA--not a study, but real access to that established program moving forward in the Energy bill. They asked for a short-term increase in the tax credit during the developmental phase of this program, something that I understand was done for the beginning of the program for corn.
With so much uncertainty facing the industry because of NAFTA, CAFTA, and other trade negotiations already in progress, I think this was a fair ask from the industry, from an efficient domestic industry that has been a robust engine for jobs in our economy for over 2 centuries. I wish the administration could have accepted that full and robust proposal in terms of ethanol.
Our sugar farmers and processors work hard and deserve a level playing field. What I have been asking, what others have been asking is not simply protectionism for our domestic industry as far as the eye can see, but a level playing field dealing with this sugar issue on a global WTO basis so it can be dealt with fairly so our domestic sugar industry has at least a chance. That is exactly what I will continue to fight for. That is precisely why I will continue to fight against CAFTA and urge its defeat in this body and in the House.
In closing, I wish to take this opportunity to thank Chairman Chambliss and Senator Coleman for their efforts to find a solution to the sugar issue within CAFTA. They have been leading a bicameral effort, working diligently. It did not yield the results I hoped, but I salute them for their efforts.
Unfortunately, as I said, those efforts did not prevail. That is why I strongly oppose CAFTA and why I ask my colleagues to do so, and specifically my colleagues in the House as this measure most probably moves there.
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