The sweeter side of sugar quotas
Our recent imposition of quotas on US sugar imports was an action taken only as a measure of last resort in defense of the domestic support program passed by the Congress last fall.
Quotas were forced upon us by the declining world price for sugar. The situation was further aggravated by unusually low US demand for sugar in 1982, due in part to higher than average imports last year. We expect that our demand for imported sugar will revert to a more normal level in 1983. At that time we would expect country quota levels to reflect more fully traditional levels of sugar exports to the US.
Secondly, there will be some positive impact on exporters' revenues derived from the imposition of quotas. Because the US support program will no longer have to be protected solely by duties and fees, imported sugar will get a price closer to the internal US price than it had. The higher price will help to offset the reduced quantities allowed into the US market.
Export earnings will, therefore, be higher for many, if not all, foreign suppliers than under the fee-based system.
Finally, the US action is not an isolated incident but part of a pattern of worldwide and deeply rooted imbalances in the international sugar economy - imbalances which have had serious results for both developing-country and US producers.
US sugar policy has been aimed at addressing some of the fundamental conditions which account for these imbalances. We have been working to make the International Sugar Agreement function effectively so as to dampen the violent supply and price fluctuations which have long characterized the so-called ''free'' sugar market. The cooperation of the European Community in those efforts was crucial to their success.
I regret that we were unable to persuade the community to reduce or end its subsidized sugar exports nor to cooperate effectively with the sugar agreement. However, we will continue to work with the community and with other major sugar producers to try to devise a workable international system for sugar.