Industry wary of talks

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WASHINGTON - The U.S. sugar industry is sending a message to the White House: Don't mess with us again.

Less than two weeks ago, sugar growers suffered a major defeat when the Senate approved the Central American Free Trade Agreement, which the industry opposed. Now the administration is negotiating a new trade deal with Thailand - one of the world's leading sugar exporters.

The industry is keeping a skeptical eye on this round of talks, which opened Monday in Great Falls, Mont. They say sugar imports allowed under CAFTA would hurt American sugar cane and sugar beet farmers, and an agreement with Thailand could be even worse.

"We said nearly two years ago that by including sugar in CAFTA, the administration was opening the flood gate to unneeded sugar from around the globe," said Montana sugar beet farmer and state Sen. Don Steinbeisser, of Sidney. "The thought of a Thailand agreement that includes sugar is frightening."

Opposition from the sugar industry has been a major sticking point in congressional negotiations on CAFTA. Though it has been approved by the Senate, members of the House are still narrowly divided on the agreement.

Sugar's role in the Thai agreement has not yet been decided. The American Sugar Alliance - a group that represents sugar growers, processors and refiners - sent a letter to the White House Monday asking President Bush to take sugar off the negotiating table.

Sen. Max Baucus, D-Mont., who voted against CAFTA in support of the sugar industry, has helped to organize the Thailand talks and said the industry will be at an advantage because it is getting involved early.

"The negotiators can look at the sugar people right in the eye," said Baucus, who is the ranking Democrat on the Senate Finance Committee. "It's early and it is right here at home."

Montana has a large sugar beet industry, as do neighboring Wyoming and North Dakota.

Like CAFTA, the trade deal would be lucrative for many other agricultural industries, including wheat, pork and cattle. The agreement would reduce and eliminate many of Thailand's tariffs, which currently average 35 percent on U.S. agricultural goods.

Steve Pilcher, executive vice president of the Montana Stockgrowers Association, said the beef industry is looking forward to new trade agreements.

"We realize that for our industry to grow it may well be important to develop some of these export opportunities, especially with countries that are developing rapidly," he said.

Baucus says he will work to find compromise between the different industries. "One side is worried about the imports, while others are worried about the exports," he said. "Our goal is to work out each of the various concerns."

An official from the office of the U.S. Trade Representative declined to comment publicly on the talks.

American Sugar Alliance spokesman Philip Hayes said the sugar industry would rather see trade agreements negotiated through the World Trade Organization.

"Only in the WTO forum can the pervasive government intervention that has so grossly distorted the world sugar market be effectively and comprehensively addressed," the alliance said in its letter to Bush.

If the agreement does include sugar imports, said Hayes, "We are going to oppose it, and we're going to oppose it with everything we've got."

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