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Talk of Molasses in January

Enzi Briefs Secretary of State Powell on Wyoming Sugar Issues

January 25, 2001

Washington, D.C. - Wyoming sugar beet growers will have their concerns about Canadian sugar imports addressed at a top level meeting today between Secretary of State Colin Powell and John Manley, Canada's Minister of Industry, according to U.S. Senator Mike Enzi, R-Wyo.

Enzi spoke with Powell on the telephone last night and briefed him on an issue which has plagued sugar beet producers in Wyoming and in other parts of the U.S. as well as sugar beet processing factory workers. Sugar was not among the items to be discussed at the early afternoon meeting today, but after speaking with Enzi, Powell agreed to discuss the problem with the Canadian official.

"Canada is engaging in sort of a sugar-laundering operation in order to avoid paying U.S. tariffs," Enzi said.

The U.S. has imposed a higher tariff rate on foreign imports of sugar to protect domestic sugar producers. But Canada undercuts U.S. sugar and legitimate foreign imports by blending low cost sugar grown in Brazil into a "stuffed molasses" formula. A commodity trader in Canada blends sugar, water and molasses in a ratio that would exempt the mixture from U.S. import duties Canada enjoys under the North American Free Trade Agreement (NAFTA). This mixture is then trucked across the U.S. border to a factory controlled by the same commodity trader where the sugar is separated from the molasses mixture. The sugar is then sold in the U.S. market free of tariff and the rest of the mixture is returned to Canada to be "stuffed" again.

Enzi is supporting legislation that would give the U.S. Customs Service the authority to plug up the "sugar loophole" and stop this circumvention of international trade law.