U.S. Agricultural Policy Works Both Ways
Brachs, the candy manufacturer, officially left Chicago yesterday. 3,500 jobs were lost to Tennessee and Argentina where land, labor, and utilities are cheaper. Candy is still a major industry in Chicago. Local manufacturing employees 10,000 people and has revenues of $3.5 billion annually. Unfortunately, with the loss of Brachs, experts expect the losses to increase.
Brachs was a union shop. Employees averaged $15 per hour. Union leaders are blaming the loss on free trade, a common target for those trying to protect artificially inflated wages.
However, free trade is not to blame for the job loss. U.S. Agricultural policy is. While the U.S. is trying to promote free trade, in the candy world, free trade doesn’t exist. Because of sugar tariffs, U.S. candy manufacturers pay Three Times as much for sugar as foreign competitors. The result has been the manufacturing loss of over 20 million pounds of candy to foreign competition.
During the latest round of WTO talks, several African nations complained and protested that U.S. agricultural subsidies where not allowing their farmers to fairly compete. The sugar tariffs acts as a subsidy to domestic sugar sources, such as beets, causing sugar cane imports to be too costly. Just as African farmers are being crushed by U.S. protectionism in some agricultural fields, so are U.S. candy manufacturers when it comes to sugar.
We need to reexamine our agricultural policies. Free Trade is meant to be Free.
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