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  • Spoonful of Sugar Needed to Stomach U.S. Trade Policy

    Early American colonists, no strangers to the perils of intrusive government, protested the Molasses Act of 1733, which imposed taxes on imported sugar, rum, and molasses. Sugar taxes ignited a desire for trade freedom that helped lead to revolution.

    In the United States today, sugar policy consists of regulations and limitations that put those of the Molasses Act to shame. In an attempt to protect domestic sugar producers from competition, the government has destroyed U.S. jobs in the candy and confectionary industries, increased prices for consumers, and undermined the American tradition of capitalism.

    The U.S. government limits the market by placing quotas on the amount of sugar that can be imported and harsh tariffs on imports surpassing those quotas. As a result, American buyers paid 62.86 cents per pound for refined sugar in 2010, when the world price was only 27.78 cents.

    In 2010, imports accounted for only about 23 percent of U.S. sugar consumption. Producers in other countries remain more than willing to sell their sugar for a fraction of the price U.S. sugar buyers are forced to pay.

    One might argue that protectionism saves U.S. jobs, but a closer look reveals just the opposite. According to Senator Richard Lugar (R–IN), who has introduced the Lugar Free Sugar Act of 2011, sugar-using companies lost over 111,000 jobs between 1997 and 2009. Consistent with Senator Lugar, the U.S. Department of Commerce states that for every sugar growing and harvesting job saved by U.S. sugar policy, approximately three manufacturing jobs are lost.

    In many cases, it is cheaper for companies to produce sugar-containing foods abroad and then import them into the U.S. Why would they want to operate in the U.S., where they pay inflated prices for sugar?

    The U.S.’s sugar policy is another example of big government doing more harm than good. Over-regulating to “save” jobs has only sent confectionary plants abroad and sent prices for consumers through the roof.

    With the U.S. dropping to ninth in the 2011 Index of Economic Freedom, perhaps Americans ought to take a lesson from our forefathers and abolish the sugar program. An increase in trade freedom, led by a relaxed U.S. sugar policy that promotes competitive enterprise, could help launch America back into the category of a “free” economy, where it belongs.

    Jane Abel currently is a member of the Young Leaders Program at the Heritage Foundation. For more information on interning at Heritage, please visit: http://www.heritage.org/about/departments/ylp.cfm

    Posted in International [slideshow_deploy]

    5 Responses to Spoonful of Sugar Needed to Stomach U.S. Trade Policy

    1. Michaeljoesph McNabb says:

      I recall learning of this arragement the sugar industry and politicians had constructed in the 1970's and realizing the was no limit to amount of damage to our economy the government and poiticians for tariff's and political contributions.

    2. Leon Lundquist, Dura says:

      Thank you Jane! I love these details. The way one protected job costs us three Manufacturing Jobs? I see a pattern. Two Private Sector jobs are lost for every Public Sector job created. You can practically see job destruction practiced like a Fine Art! I saw perfectly crazy waste in Obama's "shovel ready" bull. They put people out on the Highway in split shifts, just long enough hours to count as full time, for just long enough to count as real jobs. Then they fired them and hired someone else. So much waste in so many ways it boggles the mind! They had six guys out there to help the trucks turn onto the Highway! Trucks have been turning there safely for a hundred years, but now it takes seven guys to drive a truck! Pure waste! Studied waste! Engineered Waste!

      It was funny, in Durango we have Five Bridges To Nowhere! Count them! FIVE! So they put one of those ten thousand dollar signs out there, "Your Stimulus Dollars At Work!" Yeah, landscaping bridges to nowhere! Laughing or puking, you might lose control of your car!

    3. Richard, New Orleans says:

      Don't worry big government knows best. You just need to see the big picture!

    4. Bobbie says:

      Nice write!

      Isn't this taxation under misrepresentation? Based on nothing but government's personal opinion? Isn't this a conflict of the interests of America? I want to know why the president insists on going beyond his constitutional duties making everything harder on America when it doesn't have to be? I want to know why people are no longer personally responsible to the control of their own consumption and pay whatever effects it has on their lives? I want to know why Obama and the Mrs, insist on taking freedom away day by day? Why? Is it a goal of theirs as it is of those countries that hate America's freedom? Why Mr. President? Why do you refuse to stand for America and freedom?

    5. Js, Connecticut says:

      Jane,

      I've always viewed government quotas, tariffs & direct support of the US sugar industry as indirect support for corn growers and the high fructose corn syrup manufacturers.

      If you halve the price of sugar in America, will high fructose corn syrup be a viable business?

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