US taking tough line on Australia sugar - industry aide

Fri Sep 14, 2012 5:07pm EDT

Related Topics

* Analyst says 'no sugar for Australia' tattooed on U.S. negotiators' fingers

* Australia failed to gain new sugar exports from earlier deal with U.S.

* U.S. stance said to potentially jeopardize its other goals for talks

By Doug Palmer

WASHINGTON, Sept 14 (Reuters) - The U.S. government has told domestic sugar producers that it does not plan to allow Australia to export any additional sugar to the United States under a proposed regional free trade pact, a U.S. sugar industry analyst said on Friday.

That would be the second time that the United States has denied Australia, one of its closest allies in the Asia-Pacific region, additional sugar market access in a free trade agreement.

Tom Earley, vice president for Agralytica Consulting, said he heard Assistant U.S. Trade Representative Sharon Bomer Lauritsen make that promise at an American Sugar Alliance meeting last month in Coeur d'Alene, Idaho.

"They've tattooed it on USTR negotiators' fingers. You just look at them. 'No sugar from Australia,' it says right there," Earley joked to reporters at an event organized by the National Foreign Trade Council, an industry group.

Earley advises the Sweeteners Users Association, which represents companies that make goods containing sugar. The group has pushed for less restrictive U.S. sugar import policies, including for Australia in the proposed Trans-Pacific Partnership (TPP) free trade pact.

The U.S. Trade Representative's office did not have an immediate comment on Earley's remarks.

Although U.S. officials have said everything is on the table in the TPP talks, sugar is a sensitive issue for the United States. Sugar growers strongly defend their government program and have political clout in Florida, a battleground state in the November presidential election.

TPP talks are under way this week in Leesburg, Virginia, but a final deal is not expected until late 2013.

U.S. sweetener users remain hopeful Australia will gain some additional market access as part of the tough final bargaining needed to reach a deal, Earley said.

The United States supports domestic sugar prices through a combination of tariffs and quota restrictions.

Australia has one of the largest shares of the quota, with the right to export at least 89,087 metric tons of sugar to the United States each year.

But to the disappointment of Australian sugar producers, it failed to win any additional access to the U.S. sugar market in a bilateral free trade pact that went into force between the two countries in January 2005.

Since then, the United States allowed Central American countries and Colombia to export additional sugar to the United States under separate free trade agreements.

Bill Reinsch, president of the National Foreign Trade Council, said it appeared Australia was opposing some key U.S. priorities in the TPP talks to get leverage on sugar.

"What they're doing, which is exactly what I would be doing if I was their negotiator, is not agreeing to things that we want in order to send a signal," Reinsch said.

Unless the United States bends on sugar, it could jeopardize some of its key objectives for the talks like establishing rules for state-owned enterprises, he said.

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