Does anyone remember candidate Donald Trump carrying on about the Chicago-based Nabisco company moving 600 jobs to Mexico in 2016?
Does anyone remember the arguments about sugar imports during the debate over the North American Free Trade Agreement (NAFTA) in 1993?
Or the prohibitions against importing Brazilian-made ethanol at a fraction of what Iowa ethanol costs the American consumer?
American sugar while tiny in jobs is powerful because it spreads millions of dollars around Congress.
Did anyone notice that the Trump Administration entered office with a sugar crisis centered on Mexican imports of refined sugar?
{mosads}American sugar people claimed Mexico was violating NAFTA rules. Hot and heavy news reports brought attention to the “crisis” and Commerce Secretary Wilbur Ross drew a line and told us that sugar imports would be stopped from Mexico if an agreement wasn’t reached by a date certain in June.
Issue: American sugar producers were being out-competed by Mexican sugar producers; the specific item – refined sugar. American sugar refiners were being beaten in the refined sugar market by more efficient Mexican sugar producers. A quiet agreement was reached by the Trump Administration and the Mexicans. American sugar refiners won; they will make money by protection. The losers: American consumers.
My argument in 1993 in support of NAFTA was simply based. We in San Diego were paying double for sugar what our Mexican next door neighbors were paying two feet across the border in Tijuana.
Back to the Chicago Nabisco facility. Trump was incensed when Nabisco announced it was cutting its Chicago workforce by 600 jobs and moving those jobs to a new automated plant in Mexico. It became a campaign plank promising to stop that kind of job movement to Mexico.
NAFTA, Trump declared, was the worst trade deal in history; it was and is a “disaster.” There was no mention of why Nabisco was making the move.
The issue is nothing more than the U.S. government prohibiting a free market in sugar to protect a handful of sugar producers and refiners with the American consumer footing the bill. Americans pay as much as $1.4 Billion more in artificially-high sugar prices than they should.
Why?
Government protection of a handful of companies and their billionaire owners. They make large campaign contributions to congressional candidates of both parties; the sub-issue is a few minimum wage jobs
The unnaturally high cost of American sugar is a major expense in American bakery and candy making; when costs can be lowered, a business will prosper.
Many times that includes cutting union bakery and confectionary workers. Meanwhile the union supports restrictions on any agreements with sugar producing Brazil, Australia and Mexico.
Question: Is the union committing long-range suicide by opposing deals that could save some members their jobs.
The leading ingredient in Nabisco’s Oreo cookies is sugar; those sugar import barriers supported by the union and the handful of billionaire American sugar producers make it expensive to make Oreo cookies.
The U.S. government’s International Trade Administration reported in 2006: “Chicago, one of the largest U.S. cities for confectionery manufacturing, has lost nearly one-third of its (sugar-based sweet product) manufacturing jobs over the last 13 years. These losses are attributed, in part, to high U.S. sugar prices.”
The Nabisco job loss adds to those lost Chicago jobs.
The complaint the Trump Administration prosecuted with the Mexicans is that they were sending too much refined sugar to the U.S. market violating the NAFTA provision on sugar.
On the other hand, the Mexicans complain that American corn producers are sending too much high-fructose corn syrup to Mexico.
So what happened?
Mexico agreed to lower its shipments of refined sugar to the U.S.; but, they can send more unrefined sugar to the U.S., specifically to the very sugar refiners who made the complaints to begin with; the very refiners who want to refine unrefined sugar no matter where it comes from.
Import restrictions of refined sugar makes it possible to buy cheaper unrefined sugar from Mexico — refine it here and charge more than the world market charges outside the United States.
Before President Trump, Americans have been forced to pay twice the average world price for sugar that now continues into the future.
Where is the protection for the 330 million American consumers?
So, the Trump Administration gets Mexico to negotiate a new sugar deal but Nabisco is still moving hundreds of jobs to Mexico.
Billionaires keep their billions and 330-million Americans get screwed again and again with artificially high sugar prices.
Raoul Lowery Contreras is the author of “The Armenian Lobby & American Foreign Policy”and “The Mexican Border: Immigration, War and a Trillion Dollars in Trade.” His work has appeared in the New American News Service of the New York Times Syndicate.
The views expressed by contributors are their own and are not the views of The Hill.