How much Australian sugar should be allowed to enter the U.S. market? That’s a key question the U.S. government must answer prior to concluding the Trans-Pacific Partnership (TPP) negotiations. The United States is the largest sugar market in the TPP, consuming about 11 million metric tons (MMT) per year. It also is the largest producer (7-8 MMT) and importer (3 MMT) in the group. Australia generally is believed to be the most cost-competitive sugar producer among the12 TPP nations. It also is the largest exporter, annually shipping 3-4 MMT to other countries.
To complicate matters further, sugar liberalization was explicitly excluded from the 2004 Australia-United States Free Trade Agreement (AUSFTA) due to U.S. political sensitivities. Australian sugar producers understandably want to redress that omission. Failure to obtain commercially meaningful access to the U.S. sugar market could lead to rejection of the pact by the Australian parliament.