Emergency Committee For American Trade

ECAT Opposes Unraveling of NAFTA

News Release

For Immediate Release

February 4, 2008

Contact: Bess Gulliver

202.659.5147

ECAT JOINS BROAD SWATH OF BUSINESS COMMUNITY TO OPPOSE

UNRAVELING OF NAFTA

Proposed Managed Sugar-Trade Deal Should be Rejected

Washington, D.C., February 4, 2008: Calman Cohen, President of the Emergency Committee for American Trade (ECAT), issued the following statement upon the release of a business-community letter urging Congress and the Administration to reject managed-trade proposals that would undermine NAFTA:

“ECAT joins today with 15 other major business-community groups across all sectors of the U.S. economy to express our strong opposition to recent proposals on sugar that would unravel the NAFTA and put at risk major U.S. exports. The managed-trade sugar proposal devised by the U.S. sugar industry seeks to block trade in sugar that was fully opened by the NAFTA on January 1, 2008. Adopting this proposal as part of the farm bill would not only directly harm the U.S. sweetener, confectionery and food-processing industries, but also would undermine one of the United States’ most important economic relationships, putting at substantial risk a broad array of U.S. agricultural, manufactured and services exports to Mexico. Unraveling NAFTA would also have much broader consequences, by undermining U.S. credibility on the Doha Development Agenda and other trade negotiations. ECAT and its colleagues across every major sector of the U.S. economy urge Congress and the Administration to reject this or similar proposals that would do much harm to U.S. exports.”

The letter sent to Congressional leadership is below. A companion letter was sent to key cabinet officials as well.

# # #

Founded in 1967, ECAT is an organization of the heads of leading U.S. international business enterprises representing all major sectors of the American economy. Their annual worldwide sales total over $2.5 trillion and they employ more than six million persons. ECAT’s purpose is to promote economic growth through the expansion of international trade and investment.

February 4, 2008

The Honorable Nancy Pelosi The Honorable Harry Reid

Speaker Majority Leader

U.S. House of Representatives U.S. Senate

H-232, U.S. Capitol S-221, U.S. Capitol

Washington, D.C. 20515 Washington, D.C. 20510

The Honorable John Boehner The Honorable Mitch McConnell

Minority Leader Minority Leader

U.S. House of Representatives U.S. Senate

H-204, U.S. Capitol S-230, U.S. Capitol

Washington, D.C. 20515 Washington, D.C. 20510

Dear Speaker Pelosi and Leaders Reid, Boehner and McConnell:

On January 1, 2008, provisions of NAFTA which had limited sugar trade between the United States and Mexico expired, and trade was fully liberalized. Limitations on trade in other agricultural products, including corn, beans and powdered milk were also lifted as of January 1, 2008. Despite the long phase-in period and mere weeks after the liberalization was finally implemented, the U.S. and Mexican sugar industries have concocted a private arrangement to reverse these market-opening sugar provisions in direct contravention of the NAFTA, and are working to have the provisions of this arrangement inserted into the farm bill conference.

The sugar industry is the most highly-protected U.S. agricultural industry and has already won major additional protection in the pending farm bill, as well as an increase in their government-guaranteed price. This attempt to limit access to the U.S. market even further will have major negative impacts that go far beyond the U.S. and Mexico sugar industries.

By seeking to rewrite the negotiated commitments of NAFTA by substantially restricting sugar trade, this privately-concocted arrangement will undermine the foundation upon which trade agreements are built. If implemented, this arrangement will hurt U.S. credibility in every on-going trade negotiation, and any possible future trade negotiation. Our trading partners will be reluctant to enter into agreements, if they see the U.S. Congress passing legislation that invalidates key provisions of one of our most important trade agreements.

This arrangement is also expected to re-ignite the long-running U.S.-Mexico dispute over U.S. exports of corn sweeteners, since the deal would limit Mexico’s potential shipments of sugar to the United States by tying their export eligibility to a percentage of U.S. exports of corn sweeteners to Mexico. Furthermore, unilaterally rewriting the NAFTA sugar provisions would strengthen the hand of the numerous Mexican agricultural groups seeking to renegotiate other provisions of NAFTA, threatening U.S. exports of other important agricultural commodities.

This attempt to rewrite the rules of NAFTA, however, has implications that go far beyond sweetener and agricultural trade. Trade agreements are negotiated as a whole, both vertically within specific sectors, such as agriculture, manufacturing and services, but also horizontally with trade-offs between these different sectors of the economy. In this case, reopening NAFTA’s sugar provisions could put in jeopardy the market access achieved not only for U.S. farmers, but for U.S. manufacturers and service providers as well.

We have been strong supporters of the free trade agreements, the on-going negotiations in the Doha Development Agenda at the WTO, and Trade Promotion Authority. However, this current proposal put forth by the U.S. sugar industry threatens to undermine trade liberalizations that have been achieved, as well as threatening trade-liberalizing efforts in the future. It is critical that you stand firmly against this attempt to unravel a trade agreement that has been in force for more than 14 years. We urge you to issue the strongest possible statement condemning this arrangement and to reject any piece of legislation that contains it or similar provisions that would rewrite the provisions of NAFTA.

Respectfully,

American Beverage Association

American Frozen Food Institute

American Meat Institute

Business Roundtable

Emergency Committee for American Trade

Grocery Manufacturers Association

International Dairy Foods Association

National Association of Manufacturers

National Chicken Council

National Foreign Trade Council

National Retail Federation

Retail Industry Leaders Association

Snack Food Association

Sweetener Users Association

United States Council for International Business

U.S. Chamber of Commerce

cc: The Honorable Tom Harkin, Chairman, Senate Committee on Agriculture

The Honorable Saxby Chambliss, Ranking Member, Senate Committee on Agriculture

The Honorable Collin Peterson, Chairman, House Committee on Agriculture

The Honorable Bob Goodlatte, Ranking Member, House Committee on Agriculture

The Honorable Max Baucus, Chairman, Senate Committee on Finance

The Honorable Chuck Grassley, Ranking Member, Senate Committee on Finance

The Honorable Charles Rangel, Chairman, House Committee on Ways and Means

The Honorable Jim McCrery, Ranking Member, House Committee on Ways and Means

Attached Document(s): 02-08 ECAT Opposes Unraveling of NAFTA.pdf


	ECAT Opposes Unraveling of NAFTA News Release For Immediate Release February 4, 2008 Contact: Bess Gulliver 202.659.5147 ECAT JOINS BROAD SWATH OF BUSINESS COMMUNITY TO OPPOSE UNRAVELING OF NAFTA Proposed Managed Sugar-Trade Deal Should be Rejected Washington, D.C., February 4, 2008: Calman Cohen, President of the Emergency Committee for American Trade (ECAT), issued the following statement upon the release of a business-community letter urging Congress and the Administration to reject managed-trade proposals that would undermine NAFTA: “ECAT joins today with 15 other major business-community groups across all sectors of the U.S. economy to express our strong opposition to recent proposals on sugar that would unravel the NAFTA and put at risk major U.S. exports. The managed-trade sugar proposal devised by the U.S. sugar industry seeks to block trade in sugar that was fully opened by the NAFTA on January 1, 2008. Adopting this proposal as part of the farm bill would not only directly harm the U.S. sweetener, confectionery and food-processing industries, but also would undermine one of the United States’ most important economic relationships, putting at substantial risk a broad array of U.S. agricultural, manufactured and services exports to Mexico. Unraveling NAFTA would also have much broader consequences, by undermining U.S. credibility on the Doha Development Agenda and other trade negotiations. ECAT and its colleagues across every major sector of the U.S. economy urge Congress and the Administration to reject this or similar proposals that would do much harm to U.S. exports.” The letter sent to Congressional leadership is below. A companion letter was sent to key cabinet officials as well. # # # Founded in 1967, ECAT is an organization of the heads of leading U.S. international business enterprises representing all major sectors of the American economy. Their annual worldwide sales total over $2.5 trillion and they employ more than six million persons. ECAT’s purpose is to promote economic growth through the expansion of international trade and investment. February 4, 2008 The Honorable Nancy Pelosi The Honorable Harry Reid Speaker Majority Leader U.S. House of Representatives U.S. Senate H-232, U.S. Capitol S-221, U.S. Capitol Washington, D.C. 20515 Washington, D.C. 20510 The Honorable John Boehner The Honorable Mitch McConnell Minority Leader Minority Leader U.S. House of Representatives U.S. Senate H-204, U.S. Capitol S-230, U.S. Capitol Washington, D.C. 20515 Washington, D.C. 20510 Dear Speaker Pelosi and Leaders Reid, Boehner and McConnell: On January 1, 2008, provisions of NAFTA which had limited sugar trade between the United States and Mexico expired, and trade was fully liberalized. Limitations on trade in other agricultural products, including corn, beans and powdered milk were also lifted as of January 1, 2008. Despite the long phase-in period and mere weeks after the liberalization was finally implemented, the U.S. and Mexican sugar industries have concocted a private arrangement to reverse these market-opening sugar provisions in direct contravention of the NAFTA, and are working to have the provisions of this arrangement inserted into the farm bill conference. The sugar industry is the most highly-protected U.S. agricultural industry and has already won major additional protection in the pending farm bill, as well as an increase in their government-guaranteed price. This attempt to limit access to the U.S. market even further will have major negative impacts that go far beyond the U.S. and Mexico sugar industries. By seeking to rewrite the negotiated commitments of NAFTA by substantially restricting sugar trade, this privately-concocted arrangement will undermine the foundation upon which trade agreements are built. If implemented, this arrangement will hurt U.S. credibility in every on-going trade negotiation, and any possible future trade negotiation. Our trading partners will be reluctant to enter into agreements, if they see the U.S. Congress passing legislation that invalidates key provisions of one of our most important trade agreements. This arrangement is also expected to re-ignite the long-running U.S.-Mexico dispute over U.S. exports of corn sweeteners, since the deal would limit Mexico’s potential shipments of sugar to the United States by tying their export eligibility to a percentage of U.S. exports of corn sweeteners to Mexico. Furthermore, unilaterally rewriting the NAFTA sugar provisions would strengthen the hand of the numerous Mexican agricultural groups seeking to renegotiate other provisions of NAFTA, threatening U.S. exports of other important agricultural commodities. This attempt to rewrite the rules of NAFTA, however, has implications that go far beyond sweetener and agricultural trade. Trade agreements are negotiated as a whole, both vertically within specific sectors, such as agriculture, manufacturing and services, but also horizontally with trade-offs between these different sectors of the economy. In this case, reopening NAFTA’s sugar provisions could put in jeopardy the market access achieved not only for U.S. farmers, but for U.S. manufacturers and service providers as well. We have been strong supporters of the free trade agreements, the on-going negotiations in the Doha Development Agenda at the WTO, and Trade Promotion Authority. However, this current proposal put forth by the U.S. sugar industry threatens to undermine trade liberalizations that have been achieved, as well as threatening trade-liberalizing efforts in the future. It is critical that you stand firmly against this attempt to unravel a trade agreement that has been in force for more than 14 years. We urge you to issue the strongest possible statement condemning this arrangement and to reject any piece of legislation that contains it or similar provisions that would rewrite the provisions of NAFTA. Respectfully, American Beverage Association American Frozen Food Institute American Meat Institute Business Roundtable Emergency Committee for American Trade Grocery Manufacturers Association International Dairy Foods Association National Association of Manufacturers National Chicken Council National Foreign Trade Council National Retail Federation Retail Industry Leaders Association Snack Food Association Sweetener Users Association United States Council for International Business U.S. Chamber of Commerce cc: The Honorable Tom Harkin, Chairman, Senate Committee on Agriculture The Honorable Saxby Chambliss, Ranking Member, Senate Committee on Agriculture The Honorable Collin Peterson, Chairman, House Committee on Agriculture The Honorable Bob Goodlatte, Ranking Member, House Committee on Agriculture The Honorable Max Baucus, Chairman, Senate Committee on Finance The Honorable Chuck Grassley, Ranking Member, Senate Committee on Finance The Honorable Charles Rangel, Chairman, House Committee on Ways and Means The Honorable Jim McCrery, Ranking Member, House Committee on Ways and Means Attached Document(s): 02-08 ECAT Opposes Unraveling of NAFTA.pdf ECAT - Homepage About ECAT \| Hot Issues \| ECAT Positions Press Releases \| Trade Resources \| Key Trade Votes \| Publications Steel \| CAFTA \| Search \| Members Only Copyright 1999-2002, the Emergency Committee for American Trade