The Washington Post reports on a shameful performance by Republicans attacking CAFTA at the behest of sugar industry rent-seekers. Democrats, of course, are largely hopeless on free trade, but Republicans should know better.
The sugar issue consumed much of the hearing. The industry has been protected for decades by quotas that limit sugar imports and keep U.S. sugar prices at more than twice world levels. It enjoys significant clout partly because large cane-growing companies in the South shower campaign contributions on politicians of both parties, but also because beet farmers are widely dispersed and well organized.
In fact, Central America currently faces competitive disadvantages against other developing countries:
They also repeatedly raised the specter of China’s export juggernaut, warning that Chinese manufacturers are threatening to overwhelm their Central American and Dominican competitors. Unless CAFTA gives America’s neighbors permanent, zero-tariff access to the U.S. market for their clothing exports, apparel companies with operations in Central America “may well move production to China,” Allgeier warned, adding that since Central American clothing makers tend to buy yarn and fabric from the United States, that would cost U.S. jobs as well.
When I was in Guatemala last month, economists were concerned that Guatemala would fail to see the light on this issue. For the United States to punt because of sugar industry rent-seeking would be utterly shameful.
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