Memorandum for the Special Representative for Trade Negotiations on American Sugar Industry

Memorandum for the Special Representative for Trade Negotiations
Subject: Decision on Sugar Under Section 202(b) of the Trade Act of 1974

Pursuant to Section 202(b) of the Trade Act of 1974 19 U.S.C. 1330, 88 Stat. 2014, I have determined the action that I will take with respect to the report of the U.S. International Trade Commission on the results of its investigation regarding sugar, dated March 17, 1977. This investigation was undertaken at the request of the Senate Finance Committee.

I have determined that import relief for sugar is not in the national economic interest. Import relief, achieved either through quotas or tariff increases, would have an inflationary impact on the economy, raising prices to consumers without the promise of offsetting price stabilization benefits. Import relief would be of questionable benefit to the domestic sugar industry, because it would encourage increased market penetration by substitute sweeteners, particularly high-fructose corn syrup which can be produced at a lower cost than most U.S. sugar. Finally, import relief would adversely affect the export earnings of a large number of developing countries which depend on sugar exports for their economic growth and prosperity.

I firmly believe that it is important to maintain a viable domestic sugar industry in this country. I have therefore requested the Secretary of Agriculture to institute an Income support program for sugar producers, effective with the 1977 crop, offering supplemental payments of up to 2 cents per pound, whenever the market price falls beneath 13.5 cents a pound. Such a program will help cover the costs of production of U.S. sugar producers, pending the negotiation of an International Sugar Agreement (ISA).

The United States has made a strong commitment to the negotiation of an ISA, which, if successful, will provide some long-term assurance of greater stability of world sugar prices and supplies. The successful negotiation and implementation of an ISA would render unnecessary further consideration of unilateral measures by the United States.

Finally, I am asking you to continue to follow the sugar import situation closely and, in consultation with the Secretary of Agriculture, to advise me with respect to any need for consideration of further actions.

I have also concurred with the determination by the Trade Policy Staff Committee that sugar will remain eligible for duty-free treatment under the Generalized System of Preferences (GSP).

This determination shall be published in the FEDERAL REGISTER.

JIMMY CARTER