SUGAR

The Uruguay Round agriculture agreement will establish disciplines in the areas of market access, export subsidies, internal support, and sanitary and phytosanitary measures. In addition, countries have made a number of commitments that will benefit U.S. agricultural exports. Highlights for the U.S. sugar industry (U.S. sugar confectionery exports totaled $391 million in 1992), include the following:

Key Developments for U.S. Exports:

• EU Cuts Export Subsidies: The European Union will reduce the quantity and budgetary outlay for export subsidies from the base period level. In the year 2000, the EU's maximum annual allowable quantity of subsidized sugar exports will be 1,277,000 tons, 340,000 tons below the average quantity of subsidized exports in 1986- 90.
• South Africa Cuts Export Subsidies: South Africa will reduce its quantity of subsidized exports of sugar by 200,000 tons by the end of the implementation period.
• Japan Reduces Tariffs on Sugar-Containing Products: Japan will reduce its tariff on candies, caramels and other sugar confectionery from 35% to 25%.
• Philippines Reduces Tariffs on Sugar- Containing Products: The Philippines will reduce its tariff for sweetened cocoa powder from 50% to 35%, and the tariff for sugar confectionery from 50% to 45%.
• Thailand Reduces Tariffs on Sugar- Containing Products: Thailand will reduce tariffs on sugar confectionery and chocolate by one-third to 40% or 33.5 baht/kg except for other chocolate, which will be reduced by two-thirds to 20% or 16.67 baht/kg. Thailand will cut its tariffs on maple sugar and syrup and molasses containing added color or flavor from 65% to 30%. In addition, Thailand will limit the application of its specific tariffs to the ad valorem levels bound in its schedule. For many confectionery products this will result in an immediate and substantial cut in applied tariffs.

U.S. Commitments:

• Sugar: The United States is replacing the current tariff- rate quota for sugar with a tariff equivalent equal to 17 cents/lb, raw value, which will be reduced the minimum required 15% to 14.45 cents/lb by the year 2000. The Section 22 fee of 1 cent/lb for refined sugar and syrups will also be reduced by the minimum required 15% over 6 years. The U.S. is establishing a tariff-rate quota of 1,117,195 tons for raw sugar and 22,000 tons for other sugar and syrups effective in the first year of the agreement.

• Sugar- Containing Products: For sugar-containing products the United States is replacing the current Section 22 quotas with tariff-rate quotas at their current levels. However, the quantity historically imported as mixed condiments and seasonings will be separated from the other quotas and increased to a total quantity of 700 tons. The over-quota tariff rates for these products are based on the tariff equivalent for refined sugar, and will be reduced by the minimum required 15% in equal annual installments over 6 years. Modifications to the definitions of these quotas will be made to maintain the product coverage intended when they were first introduced.

  (Note: This fact sheet is a summary of Uruguay Round highlights; it does not reflect all results.)

  June 1994

Last modified: Friday, November 18, 2005