Obama's Cuba deal is no sweet deal for candy lovers

You might think that it could make candy and other sweets less expensive. After all, Cuba historically is one of the world's main suppliers of sugar, and opening up the American market to Cuban sugar imports could drive down the price of your Reese's pieces and other favorites.

It won't happen because the American sugar cane and sugar beet industry has one of the sweetest deals imaginable to protect itself from foreign competition. Normally, you might expect the American sugar growers to fear the lifting of the trade embargo. As Douglas Irwin notes in the Wall Street Journal:

The only domestic interest group that should fear expanded trade with Cuba are America’s sugar cane growers in Florida and sugar beet farmers in the upper Midwest. They deserve no sympathy. By demanding strict import quotas that make the U.S. price of sugar roughly double the world price, sugar interests have pilfered consumers and destroyed jobs in America’s candy and confectionary industry for far too long.

The American sugar industry has one of the sweetest deals imaginable to protect itself from foreign

Sugarcane field

Sugarcane field

competition. Here's another explanation:

Sure, Cuba would most likely produce sugar at a cheaper price than what Idaho farmers could, but Thompson said not only is our product better quality, but sugar beets are one of the only commodities protected under what is called a tariff-rate quota.

This means, companies in the U.S. have to purchase sugar from local sugar producers first, up to a certain quota set by the government which is expected to meet the annual demand....

Thompson said sugar is one of the few commodities that does not receive a government subsidy, so that is why this TRQ protection is in place....

Poor things.

In short, U.S. candy companies can't start buying cheaper sugar from overseas sources for their products until they have met the domestic quota. It's one of the most protectionist provisions in American trade policy. And it is one reason that the domestic American candy-making industry has fallen on hard times, seeing some of their jobs getting shipped overseas.

Thank you, sugar lobby.

Related: Prospects for Quick Cuban Sugar Comeback Not so Sweet

Related: Businesses feeling bite of high sugar prices

For information on my award-winning historical novel, "Madness: The War of 1812," visit: http://www.madness1812.com

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  • Years ago when sugar prices fell world wide, Cuba switched a lot of sugar cane fields to other agricultural products. Not real successfully but they tried to get off being a one product economy. I liked reading this because I hadn't realized that American sugar and beet farmers had this deal nor considered the possible future lifting of the embargo's influence on candy. As only Congress can do that we'll see when or if that happens.

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    As you know that Obama will always provide the excellent suggestions for their people. He will always make the decision in the right way. As you know Ecommerce Development Qatar is make your business in a better way to improve your business.

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    U.S. candy companies Maruti can't start buying cheaper sugar from overseas sources for their products

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