TPP would hurt the US sugar industry

Sugar Industry Sour on Trade Talks 
by: William Mauldin
Jul 30, 2015
Click here to view the full article on WSJ.com

TOPICS: International Trade

SUMMARY: High-level talks to wrap up a 12-nation Pacific trade pact have put one set of Hawaii's locals on edge: Maui's sugar cane operation, which is concerned that U.S. concessions to growers in other countries could hurt its business model. "The proposed Trans-Pacific Partnership appears all but certain to allow more sugar imports into the U.S. from some countries, putting pressure on farmers and potentially disrupting a carefully balanced government program that protects the industry, American growers say."

CLASSROOM APPLICATION: Students can examine the winners and losers of reducing trade barriers. With reduced U.S. trade barriers for sugar imports, losers could include the U.S. sugar farmers and processors, while winners could include American confectioners and other sweetener consumers. Students can also examine the tradeoff to U.S. politicians of reducing trade barriers. "As with several thorny issues in the Pacific talks, U.S. trade representative Mike Froman is seeking to strike a delicate balance on sugar, opening American markets to more foreign competition without disrupting a politically entrenched program protecting the industry, according to people following the talks."

QUESTIONS: 
1. (Introductory) What is the effect of the U.S. lowering barriers to sugar imports on the price of sugar in the U.S.?

2. (Advanced) In the U.S. who is harmed by reduced barriers to sugar imports? Who benefits by the reduced barriers?

3. (Advanced) What is the effect of U.S. increasing the Australian quota on the Mexican sugar industry?

Reviewed By: James Dearden, Lehigh University