[It appears Spencer "for sale" Abraham will even get into the sugar business to raise cash.]

Detroit News Editorial
Tuesday, June 20, 2000




Congress: Don't Play Sugar Daddy
he powerful American sugar industry has taken on a small, 60-employee,
Taylor-based company that imports Canadian molasses syrup without paying the
tariffs that prop up U.S. sugar prices . Sugar and beet moguls were
unsuccessful in getting the U.S. Customs Service to put Taylor's Heartland
By-Products Co. out of business. Now they've turned to Congress, which
should resist playing the role of sugar daddy to special interests.


The Windsor, Ontario-based firm Canadian Blending and Processing
prepares a molasses syrup using Brazilian sugar and ships the mixture to
Heartland By-Products in Taylor. Here, the sugar is extracted, refined and
sold to industrial manufacturers of cereal, hard candy and dairy products,
such as ice cream. The residue is sent back to Canada to restart the
process.


American sugar farmers and processors say this is designed to evade
import quota laws. Beet farmers in Michigan and other Midwest states
reportedly complain that the prices they have received for their crops have
declined by nearly 26 percent since 1996, due in part to Heartland's sugar
refining process.


Heartland, whose products make up less than 1 percent of the U.S. sugar
market, is in full compliance with applicable laws. Five years ago, in fact,
Heartland applied for and was granted a tariff classification ruling from
the Customs Service for the sugar syrup it wanted to import from Canada.
Customs exempted it from the tariff rate quota, which is designed to prop up
the price of American-grown sugar.


At the urging of the sugar industry lobbies and 26 senators - including
Michigan's Carl Levin and Spencer Abraham - Customs Commissioner Raymond
Kelly reversed the decision that allowed Heartland to avoid paying the
higher tariffs. But Heartland was victorious in the Court of International
Trade, which restored its exemption.


Now the big sugar companies have taken their fight to a new arena - the
U.S. Congress. The objective is an amendment that would increase tariffs on
Heartland's sugar syrup by as much as 7,000 percent. Heartland contends it
would be put out of business.


Congressional re-straint is in order. Rather than endeavoring to be the
sugar industry's sugar daddy, federal lawmakers should be furthering the
interest of free enterprise, free trade and lower prices for consumers.
Intervention in this case would invite retaliation from America's trading
partners and subvert the North American Free Trade Agreement. It also would
signal that special-interest politics can supplant the rule of law and free
trade - hampering America's position in the next round of trade talks.


Congressional intervention in this case would be bad medicine - and a
spoonful of sugar won't make the medicine go down.