THE BITTER TASTE OF U.S. SUGAR
For decades, political support for the U.S. sugar program has been underpinned by the general sense that the costs of producing sugar in this country are quite high relative to prices prevailing in world markets. Thus, the elimination of government support would lead to the certain death of the sugar industry. In “Toward Free Trade in Sugar” (Policy Analysis no. 768), Daniel R. Pearson, a senior fellow with the Cato Institute’s Herbert A. Stiefel Center for Trade Policy Studies, reviews the recent history of U.S. government intervention in sugar markets from the time price supports were reestablished as part of the 1981 farm bill. “Since then,” he writes, “sugar has been subject to a higher degree of government control than any other major agricultural commodity.” Among the consequences of those protectionist policies have been higher incomes for U.S. sugar growers, expanded domestic production, reductions in imports from traditional suppliers, increased trade frictions, U.S. unwillingness to provide meaningful sugar market access during trade negotiations, higher costs to consumers, and transfer of confectionary manufacturing capacity away from the United States to countries with more open and competitive sugar markets. The paper concludes with a discussion of the primary alternatives for ending U.S. sugar protectionism. “The best approach may be to set an example for the world by enacting unilateral reforms, then use the resulting moral leverage to build momentum for multilateral liberalization,” Pearson writes.
EXTENDING ONLINE MEDICINE
The Internet revolution has been disrupting traditional industries for years by enabling online provision of various services. The first industries to convert have been digitized media services, such as journalism, music, and videos. But less obvious candidates for online provision are emerging. One of these is telemedicine, which is the delivery of health care services from one site to another via electronic communications. “As medical treatment moves online, the potential for treating patients across borders grows,” Simon Lester, a Cato trade policy analyst, writes in “Expanding Trade in Medical Care through Telemedicine” (Policy Analysis no. 769). In the United States, medical treatment has typically been segregated along state lines. With the ease of access between patients and doctors in different jurisdictions, however, this is beginning to change. “Regulations will need to be adjusted to allow interstate trade so that consumers can reap the benefits,” Lester adds. Similarly, at the international level, governments should adapt their national regulations to allow trade in these services. This can be done, in part, through a number of ongoing trade negotiations that address barriers to trade in services, including the Trans Pacific Partnership, the Transatlantic Trade and Investment Partnership, and the Trade in Services Agreement negotiation. By using these trade negotiations to remove barriers and promote more international trade in medical services, Lester concludes, governments can bring new competitive forces to a sector that has traditionally been characterized by an oligopolistic structure.
In what the Obama administration describes as a “years‐long” coalition effort to “degrade and destroy” ISIS, the United States has reentered conflict in the Middle East. The White House heralds its close cooperation with Arab allies, including a number of petrostates such as Saudi Arabia and Qatar, describing their cooperation as vital to the success of the campaign. Yet, as Cato visiting fellow Emma Ashford argues in “Friends Like These: Why Petrostates Make Bad Allies”(Policy Analysis no. 770), petrostates are unlikely to be good allies for the U.S. campaign in Iraq and Syria. According to Ashford, the reliance of those countries on oil and gas revenues distorts both foreign policy decisions and their implementation. “First, petrostates have weak foreign policy institutions, producing policy that is of poor quality and strongly driven by personalities,” she writes. “Second, the vast flow of oil income enables the states to back nonstate actors in conflicts, but their weak civil service cannot control the flow of arms or funds. Third, oil income also enriches private citizens, some of whom directly fund terrorist organizations such as ISIS.” As allies, petrostates are especially likely to draw America into unnecessary and intractable conflicts. In particular, Ashford concludes, Washington should largely disentangle itself from the Saudi alliance and from reliance on Saudi intelligence and diplomatic services. Keeping Saudi Arabia at arm’s length will help to minimize involvement in Middle East conflicts that are not vital to U.S. interests.