American Sugar Industry Letter to the Speaker of the House and the President of the Senate Transmitting a Report.

Dear Mr. Speaker: (Dear Mr. President:)

In accordance with Section 203(b) (2) of the Trade Act of 1974, enclosed is a report to the Congress setting forth my determination that import relief for the U.S. sugar industry is not in the national economic interest, together with the reasons for that determination.

Sincerely,

JIMMY CARTER

IMPORT RELIEF ACTION

SUGAR

In accordance with Section 203 (b) (2) of the Trade Act of 1974, I am transmitting this report to the Congress setting forth the actions I will take with respect to sugar imports covered by the affirmative finding on March 17, 1977, of the United States International Trade Commission (USITC) under Section 202(d)(1) of the Trade Act of 1974.

I have determined that import relief for the sugar industry is not in the national economic interest. Import relief, achieved either through quotas or tariff increases, would have an inflationary, impact on the economy, raising prices to consumers without the promise of offsetting price stabilization benefits. It would be of questionable benefit to the domestic sugar industry, because it would encourage increased market penetration by substitute sweeteners, particularly high-fructose corn syrup, which can be produced at a lower cost than most U.S. sugar.

In addition, the U.S. has entered into negotiations for an International Sugar Agreement (ISA) which, if successful, would provide some long-term assurance of greater stability in world prices. Imposition of import relief now would likely jeopardize the success of these negotiations. Finally, imposition of import relief would adversely affect the export earnings of a number of developing countries which depend on sugar exports for their economic growth and prosperity.

However, in recognition of the problems facing much of the U.S. sugar industry due to low sugar prices, I am requesting the Secretary of Agriculture to institute an income support program, for sugar producers, effective with the 1977 crop, offering supplemental payments of up to two cents a pound whenever the market price falls beneath 13.5 cents per pound. Such a program will help cover the costs of production of many U.S. sugar producers, pending the successful negotiation and implementation of an ISA. The United States has made a strong commitment to the negotiation of an ISA which, if successful, will provide some long-term assurance of greater stability .of world sugar prices and supplies. The successful implementation of an ISA would also make further consideration of unilateral measures unnecessary.

Finally, I have asked the Special Trade Representative to continue to follow closely the sugar import situation and in consultation with the Secretary of Agriculture, to advise me with respect to any need for consideration of further action.