Nov. 9, 2015, Fairfax, Va.—Americans for Limited Government President Rick Manning today issued the following statement applauding Sen. Marco Rubio (R-Fla.) for coming out in favor of a zero for zero approach to eliminating U.S. sugar subsidies:
“Sen. Rubio has exactly the right approach to zero for zero sugar subsidies policies, which is to say, the U.S. should get rid of its subsidies when the rest of the world gets rid of theirs. This is the same exact approach akin to reciprocal tariff reduction that has been in place since the end of Smoot-Hawley. Everyone knows in a negotiation, that if you unilaterally cede ground, you lose all leverage. Unilaterally offering to end U.S. sugar and other agricultural subsidies would be like unilaterally offering to end tariffs on imported goods, without expecting anything in return. Why would we do that?
“Such an approach would wreck U.S. domestic production of sugar in favor of foreign competitors like Brazil who subsidize their sugar and want to dump it all over the market the minute we remove our subsidies. The same exact thing happened in the European Union, where after they took down their subsidies in the mid-2000s, foreign competitors dumped subsidized sugar onto the market, dramatically reducing domestic production. The Europeans went from being the second largest exporter to the world’s largest importer, according to a 2012 ProSunergy study.
“All this because world trade rules grant favors — special and differential treatment — to so-called developing nations like Brazil. Why would we continue with an approach that already subsidizes foreign competition with unfair rules, and then offer them even more subsidies on top of that by eliminating domestic protections?
“This is why we need zero for zero. In a true free market, there would be no subsidies. U.S. producers must not be asked to bow to foreign industries that are bankrolled by their governments. This is not about sugar, it is about what is fair. And it is not fair to tell our farmers that their livelihoods are being outsourced to a foreign country that is subsidizing and cheating the system.
“We all want a free market. Not just in sugar, but for all industries. But unilaterally disarming America’s subsidies and hoping our heavily subsidized competitors follow suit is not a realistic way to achieve a free market. That is just wishful thinking and it is naïve. Yes, we should eliminate U.S. sugar subsidies, but we need to do it in a way where we can use it as leverage to actually achieve global reform and, then only when other governments are getting out of the market, too. It’s called negotiating, and it’s time we stopped losing those negotiations.”
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