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Simpson Calls Attention to CBO Report on CAFTA Impacts

Date: July 21, 2005
Location: Washington DC
Issues: Trade


Press Release
July 21, 2005

Simpson Calls Attention to CBO
Report on CAFTA Impacts

Washington, D.C. - The sugar provisions in the Central America Free Trade Agreement (CAFTA) would cost U.S. taxpayers $500 million over the next 10 years, according to estimates released this week by the nonpartisan Congressional Budget Office (CBO).

The CBO-the arm of Congress that estimates the cost of legislation-also found that revenues to the U.S. treasury would fall by $4.4 billion over the same 10 year period, or about $440 million a year.

"I don't need another reason to vote against CAFTA, but the fiscal questions that have now emerged in the CBO report should give pause to anyone thinking of supporting this misguided trade agreement," said Rep. Mike Simpson (R-ID), a member of the House Budget and Appropriations Committees. "Not only would CAFTA threaten the livelihoods of thousands of U.S. sugar farmers and workers, but now we have proof that it's a bad deal for taxpayers and would be a revenue loser, too."

According to the CBO, the low sugar prices and oversupply caused by CAFTA would force U.S. sugar farmers to forfeit on sugar loans made by the government. These forfeitures, CBO said, would cost the federal government about $50 million a year.

America's sugar program currently operates at zero cost to taxpayers, and the concern over carrying a price tag is one reason sugar farmers fiercely oppose CAFTA.

"It was my hope all along that our trade negotiators would do what I asked them to do over a year ago and take sugar out of the CAFTA agreement," Simpson said. "They refused, and instead this agreement jeopardizes thousands of U.S. sugar jobs, imperils rural communities, and endangers the $10 billion U.S. sugar industry by setting a dangerous precedent for future trade deals."

Despite the fact that CAFTA faces tremendous opposition in Congress, the Administration met with trade officials from Thailand last week to negotiate a similar trade pact.

Sugar has not been excluded from the Thai talks, and Simpson worries that $500 million would be the tip of the iceberg if additional sugar market access is granted to Thailand, Brazil, or other countries seeking trade deals with the U.S.

http://www.house.gov/apps/list/press/id02_simpson/cafta_cbo.html

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