Sugar Import Changes Could Lower Costs, GAO Says

A recent report from the Government Accountability Office finds that changes to the process of allocating tariff-rate quotas for imported sugar could lower costs for food manufacturers.

According to the report, he U.S. is one of the world’s largest consumers of sugar and relies on imports to help meet consumer demand. Almost half of U.S. sugar imports are subject to trade commitments made through the World Trade Organization and free trade agreements. However, the report states, WTO tariff-rate quotas are allocated among sugar-importing countries using a method based on 40-year-old data, including to countries that have not used their TRQs in 15 years, which has led to sugar import shortfalls averaging 13 percent per year since 2006 and delays in obtaining sugar.

Despite this situation, the report states, USDA and USTR have not considered the potential benefits of alternative TRQ allocation methods even though USTR knows that options may be available that are within its current statutory authority and consistent with WTO commitments. The report therefore calls on the two agencies to evaluate these options, stating that determining and using the most effective available TRQ allocation method may help ensure that adequate supplies of sugar are available in the U.S. market, ease potential supply chain issues, and lower costs to consumers and the U.S. economy.