Both a U.S. congressman and the head of the last remaining sugar plantation on Kaua’i feel the end could be near for Hawai’i’s sugar industry.
The approval of the Central America Free Trade Agreement (CAFTA) could lead to other, liberal agreements that would allow cheaper, foreign-grown sugar into the U.S. market, leaving Hawai’i growers and other domestic planters unable to compete, said Alan Kennett, general manager of Gay & Robinson sugar plantation in Kaumakani.
“This (Bush) administration has opened the door for the demise of the sugar industry,” Kennett said.
U.S. Rep. Ed Case also assailed the agreement, which still must be approved by Congress before taking effect.
“It’s a real danger for the domestic sugar industry, especially G&R on Kaua’i,” said Case, D-Neighbor Islands-rural O’ahu. “If it is passed, it will make it difficult for small companies like G&R to continue operations.
“CAFTA by itself won’t break the camel’s back. But what it does is set a precedent that opens the doors to future agreements,” said Case.
Kennett agreed. “By itself, the agreement doesn’t really affect us adversely. However, it does build the framework for other agreements down the road.”
Although Congress hasn’t ratified the proposal yet, CAFTA would raise the quota of sugar imports over 75 percent from countries such as El Salvador, Guatemala, Nicaragua and Honduras.
Kennett added that future agreements with larger sugar-exporting countries, like Australia, Thailand and South Africa, could pose bigger threats to the industry.
Currently, under the World Trade Organization (WTO) quota, 111,000 tons are allowed to be imported.
“We have always maintained that these trade discussions should be handled by the WTO and not regionally or bilaterally,” said Kennett.
CAFTA would allow an additional 85,000 tons of sugar to be imported from the four countries next year, as well as lowering trade barriers in the Central American countries.
It is estimated that the there could be an annual tonnage increase of 2 percent over the next 15 years under CAFTA.
The agreement could decimate the last two remaining sugar plantations in the state, including G&R, which has 11,000 acres of land in sugar or planned to be planted in sugar in Kekaha and Makaweli.
Production of cane for sugar increased about 11 percent to 2.1 million tons last year at G&R, in addition to the Hawaiian Commercial & Sugar Co. of Maui.
Farm-level state sugar sales rose 11 percent to $64.3 million in 2002, while sales of raw sugar also rose nearly 11 percent to $95.9 million during that same time.
According to U.S. trade representatives, the CAFTA would help domestic markets by expanding “economic opportunities for U.S. farmers.”
U.S. Sugar Industry Chairman Carolyn Cheney said the proposed CAFTA is unacceptable.
“The additional sugar imports proposed and those contemplated in additional bilateral trade agreements will destroy the domestic sugar industry,” Cheney said. “Those imports will overwhelm an already abundantly supplied market.”
She added, “We will have no choice but to oppose CAFTA.”
Additionally, Cheney said, “We have insisted that sugar trade issues need to be addressed globally in the WTO, not piecemeal in bilateral and regional trade agreements.”
Negotiations for CAFTA began in January, with U.S. officials attempting to “strengthen ties with the Central American region.”
Representatives of many sugar companies, including G&R’s Kennett, tried to petition President Bush, saying CAFTA would hurt the industry.
Almost 500 G&R past and present employees and officials signed a petition to Gov. Linda Lingle in a show of opposition to the agreement.
Before Congress ratifies the agreement next year, Kennett stated that sugar companies will aggressively lobby in hopes of protecting the industry.
“We have a huge battle on our hands with Congress,” said Kennett. G&R has around 300 employees.
Business Editor Barry Graham may be reached at 245-3681 (ext. 251) or mailto:bgraham@pulitzer.net.
