Study Documents Wide Labor, Environmental Disparities Between Florida Sugar Industry and Guatemala, Brazil

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Study Documents Wide Labor, Environmental Disparities Between Florida Sugar Industry and Guatemala, Brazil

Florida Sugar Industry Labor Management Committee Says Sugar Trade

Issues Should be Addressed in WTO, not Regional Trade Agreements

FLORIDA, PEMBROKE PINES, Sep. 4 -/E-Wire/-- The Florida Sugar Industry Labor Management Committee today released a new report detailing extraordinarily low wages and inadequate environmental controls in the sugar industries of Guatemala and Brazil. The Committee said the report offers unambiguous proof that sugar trade issues should be addressed by the World Trade Organization, which begins meeting next week in Cancun, Mexico, rather than piecemeal regional trade agreements.

Brazil and Guatemala, Latin America's first and third largest sugar producers and exporters, revealed particularly disturbing trends, according to the report. The minimum hourly wage for a sugar laborer in Brazil is 58 (U.S.) cents per hour and in Guatemala it is 64 (U.S.) cents, compared with a sugar field laborer in Florida who earns a minimum of $8.58 per hour. Citing new information from the country's largest cane producer, the report said the combined costs of wages and benefits for the average unskilled Guatemalan sugar factory worker is $1.70 (U.S.) an hour compared with $23.09 for starting laborers at a Baltimore plant that refines Florida sugar.

"The worker remuneration situation in Guatemala, despite the admirable social programs run by the industry, is one of widespread denial of the basic worker right to organize and bargain collectively with management," the report said. It also cited studies showing that child labor is growing in Guatemala, and that environmental issues are generally either ignored, underestimated or inadequately addressed.

"Guatemala and Brazil are rife with trade-distorting labor and environmental differences that lower production costs," the report by Peter Buzzanell & Associates, Inc., an economic consulting firm, concluded. "Guatemala and Brazil's cane sugar industries stand as prime examples of why regional or bilateral free trade agreements (FTAs) are destined to fall short of achieving a level global playing field."

Members of the Florida Sugar Industry Labor Management Committee, which includes representatives of U.S. Sugar Corp. and Florida Crystals Corp. and the International Association of Machinists (IAM), said the study showed why global reforms can only be accomplished through World Trade Organization negotiations.

"Florida sugar companies and workers would start off with three strikes against them in any regional trade negotiations," said Frank Ortis, executive director of the Florida Sugar Industry Labor Management Committee, who is also the former president of the Florida State Council of Machinists, IAM. "Competitors from Guatemala and Brazil have substantially lower wages, few or no basic workers' rights in the case of Guatemala, and lower environmental standards. Regional and bilateral free trade agreements typically leave these issues untouched. Failure to address these trade issues at the WTO level will result in an uneven playing field and lost U.S. manufacturing jobs. A piecemeal approach of ineffective regional agreements will not work."

Jorge Dominicis, vice president of corporate affairs for Florida Crystals Corp. and a member of the Labor Management Committee, said: "This comparison of Guatemala and Brazil with Florida offers a case study in the wide gap in labor and environmental standards between developed and developing countries. These gaps translate into substantially lower operating costs for developing nations and must be taken into account in the next trade round. The right way to address trade distortions is to address them comprehensively and globally, thereby ensuring that global standards rise to developed-country levels. Otherwise the United States will be overrun with unfairly, cheaply produced sugar from abroad, which will be a disaster for domestic producers."

The Committee commissioned the report by Peter Buzzanell & Associates, Inc., which specializes in analyzing sugar and coffee markets, six months ago. Buzzanell is a former U.S. Department of Agriculture official who served as U.S. agriculture attachÃ© to Brazil and was later head of the sweetener analysis section for the department's Economic Research Service. Buzzanell analysts visited both countries, sugar plants, and reviewed economic studies.

The United States currently is pursuing regional or bilateral free trade agreements (FTAs) with 44 countries. One proposed agreement, the Central America Free Trade Agreement, includes Guatemala. Another agreement, the Free Trade Area of the Americas, includes Brazil, the world's largest sugar producer.

The Buzzanell & Associates report included these conclusions:

--- Guatemala ranks third among the world's lowest-cost producers of sugarcane, according to a report by LMC International, Inc. Brazil's Center-South region ranks as the world's second-lowest cost producer of sugarcane, according to LMC.

--- Workers' right exists on paper in Guatemala, but in practice the government does not enforce labor laws effectively or protect workers who exercise their rights. These findings are underpinned by reports by the U.S. State Department, AFL-CIO Solidarity Center, the World Bank, and the United Nations. In sharp contrast, Brazil has a very active trade union movement, but hourly wages and annual wage income remain very low.

--- Both countries have extreme inequality in their income distributions. For example, Guatemala's top 20 percent of the population receive 62 percent of the income and the bottom 20 percent only 3 percent, according to the recent World Bank report Poverty in Guatemala. Inequalities in income has at its root cause the very low wages paid to a high percentage of the labor force.

--- Child labor remains a serious problem in both countries. Child labor is approaching one million in Guatemala, while the International Labor Organization and the Brazilian Government estimates that 5.5 million children in Brazil are in the workforce.

--- A general environmental law exists in Guatemala, but there are no standards for air and water quality. While the sugar industry is taking some initiatives to correct the situation, overall spending on facilities and programs to reduce pollution caused by the industry is inadequate. In contrast, Brazil has a modern code of environmental laws, but monitoring programs are weak, especially for monitoring of effluents from sugar mills and distilleries.

--- Control of the use of pesticides in Brazil appears less rigorous than in the United States. Brazilian researchers have found, for example, relatively high concentrations of the herbicide, tebuthiuron, in the ground water in a leading sugarcane-growing region in the State of Sao Paulo. This herbicide, which is not approved for use in Florida, is still being used in Brazil.

--- Florida's sugarcane workers "enjoy fair wages, good benefit packages, high workplace safety standards and the option of union representation."

The Florida Sugar Industry Labor Management Committee is a partnership of labor and management that was formed to educate the public about policy issues affecting the sugar industry and its jobs. The Committee periodically conducts or sponsors studies about the impact of various industry issues.

Sugar Industry Labor Management Committee

Don Foley or Amanda Deaver

[REDACTED-EMAIL]

Prism Public Affairs

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