It was supposed to be the ultimate free trade deal — a tie-up of 12 countries representing about 40 per cent of global GDP.

But the American-led Trans-Pacific Partnership (TPP) failed at the last hurdle earlier this month, where a dispute over sugar was among the many stumbling blocks, and specifically, America's refusal to open its sugar markets to greater competition and free trade.

In the complex world of free trade talks, true freedom remains an unattainable goal. Freer trade may be the result, but the benefits are often hard to measure or identify.

While it was largely unstated, the TPP was also America's opportunity to exploit regional concerns about China's rise; to create a regional alliance based on a trade agreement.

Trade negotiators often become the conduits for lobby groups looking to extend or protect their vested interests. And few lobby groups are as effective as the American Sugar Alliance.

"Multinational food makers want artificially cheap sugar to boost corporate profits, even if it means jeopardising 142,000 US sugar jobs and America's food security," according to one of the lobby group's slickly produced video presentations.

Among those accused of peddling artificially cheap sugar is Australia and the lobby was quick to jump on those who might suggest otherwise.

"If we were to have much freer trade in sugar, I doubt that there would be much grown in the US," the Sugar Alliance said.

"Too many countries like Brazil and Australia simply can grow it much more cheaply."

The American Sugar Alliance, which declined an interview request for this story, sees unfair competitors everywhere.

Australia has been accused of receiving direct grower payments, credit subsidies and exporting sugar at prices below the domestic prices — an accusation that rankles Canegrowers Association economist Warren Males.

"The US sugar alliance is drawing a very long bow in making those statements," Mr Males said.

"Australian sugar producers do not receive support from the Government, there are no financial payments that are made."

US growers terrified by TPP

Much of America's sugar comes from sugarbeet, a root plant grown across the Midwest that produces lower-grade product at a higher cost. Not that American producers see it that way.

"US sugar policy prevents a flood of foreign-subsidised sugar from cascading into our market, allowing efficient US producers to provide sugar to our consumers," Luther Markwart of the American Sugarbeet Growers Association said.

Efficiency isn't the word that springs to mind when considering America's tough import quota restrictions and government guarantees which provide domestic growers at least 85 per cent market share and a minimum price.

But that doesn't prevent some astounding claims.

"We get all of our income from the marketplace, not from government cheques or subsidies," Mr Markwart said.

Nevertheless, US growers are terrified by the prospect of a TPP which genuinely delivers freer trade.

"It has the ability to tip some of our businesses, like Hawaiian Commercial & Sugar Co into the ... It's unprofitable for us to continue to grow sugar," the company's general manager Rick Volner said.

If we were to have much freer trade in sugar, I doubt that there would be much grown in the US. Too many countries like Brazil and Australia simply can grow it much more cheaply.

American Sugar Alliance

American lobbyists constantly claim Australia subsidises sugar, pointing to drought relief — a claim Australian growers reject.

"There are general support programs available to agriculture in the US and in Australia for adverse circumstances, but in the US there are very strong programs for price support," Mr Males said.

That American support doesn't come without substantial political and financial clout.

The sugar lobby is among the biggest political donors in Washington, contributing more than $20 million to congressional candidates on both sides of politics over the past five years.

Presidential candidates from the cane-growing key state of Florida, Marco Rubio and Jeb Bush, whose campaign recently received more than $500,000 of sugar money.

"They spend some millions of dollars each year to protect $3.3 billion worth of benefit above world market prices," Mr Males said.

"For them, it is a sound business investment decision."

But American sugar lobbyists point to inconsistencies in Australia's push for increased American access under the TPP, arguing Australian producers didn't gain any further access in recent agreements with China and Japan.

And they point out Australia isn't campaigning for an end to protectionism under the TPP. It wants a bigger share of a protected market to gain higher prices.

According to Mr Males, there is no reason Australia should not be able to meet some of that growing import need.

Apart from the need for politicians to protect their interests.

Source: abc.net.au

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