How free trade can save the Everglades

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CONTENTS

I. INTRODUCTION

In light of the recent wave of environmentally-inspired

protests against the lowering of trade barriers, it is particularly ironic that United States protectionism is, in at least one instance, resulting in catastrophic environmental damage. The Florida Everglades, designated by the United Nations as a World Heritage Site,1 is critically endangered by the South Florida sugar industry.2 Oddly, though, growing sugar in South Florida makes no economic sense. It has taken decades of heavy-handed protectionism to make the sugar plantations of Florida possible.

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Americans currently pay significantly more for their sugar than do consumers in the rest of the world. The artificially high prices in the United States are supported by a complex system of direct and indirect subsidies, tariffs, and non-tariff barriers. This government intervention in support of the price of a single fungible commodity benefits a very small number of United States sugar

producers. As a direct consequence of this support, enormous damage has been and continues to be inflicted upon the irreplaceable natural resources of the Everglades and Florida Bay.

The remedy is absurdly simple: the United States should drop its tariffs on imported sugar to more reasonable levels, and should eliminate all non-tariff barriers. The sugar producers of South Florida, who enjoy no natural competitive advantage, will fade away.3 Alternate uses will be found for the land and water resources of South Florida, few of which are likely to be as environmentally destructive as sugar production. Given the tremendous influence that the sugar producers seem to enjoy in Washington, they will probably be able to convince the government to purchase some or all of their land, at or above market value, for incorporation into Everglades National Park. This potential resolution would present a large but non-recurring cost, with tangible environmental benefits. The political benefits would be significant as well, as environmentalists would be delighted and agribusiness interests at least mollified. There would also be economic benefits, as consumers would divert the extra money now spent on overpriced sugar to other, more productive uses.

This article will examine the role of the federal government in the destruction of the Everglades. Part II.A examines the creation of the Florida sugar cane industry, while Part II.B discusses the continuing role of the government in subsidizing the continuing operation of the industry. Part III concludes that the extreme market distortion created by government interference has proved disastrous for the Everglades environment, and that the only hope for the survival of the Everglades lies in dismantling the existing protectionist regime and allowing market mechanisms to function.

II. THE EVERGLADES AND THE SUGAR INDUSTRY

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The Everglades is a unique and fragile environmental system, home to hundreds of species of plants and animals. Human activities over the past century have already wreaked enormous devastation on the Everglades; the popular image of the Everglades as a "river of grass" is itself the result of a loss of biodiversity, opening ecological niches to be filled by sawgrass.4 As early as 1929, scientists were lamenting "the wholesale devastation of the plant

covering, through carelessness, thoughtlessness, and vandalism in the Peninsular State[.]"5

Administratively, the Everglades can be roughly divided into three areas. The southern part, where the Everglades flows into Florida Bay, lies largely within Everglades National Park. The northern part contains the Everglades' headwaters: Lake Okeechobee and the lands of the Everglades Agricultural Area (EAA) to the south and southeast.6 The central part contains the Water Conservation Areas, which serve as reservoirs for South Florida's urban areas and receive excess water discharged from the EAA.7

Two human activities threaten the Everglades above all others: agriculture and urban development. Of the two, agriculture is the more destructive and the more easily addressed. The bulk of the land in the EAA is farmed by just two companies, United States Sugar and the Fanjul family's Flo-Sun Corporation and associated companies. These two entities produce a crop readily available from other, albeit foreign, suppliers at lower prices: sugar.

A. GOVERNMENT INTERVENTION TO CREATE AN AGRICULTURAL INDUSTRY IN THE EVERGLADES

Sugar production has a short but brutal history in Florida. Agriculture's assault on the Everglades began in 1918 with the completion of the Florida East Coast Railway to Moore Haven.8 Early would-be settlers found the land difficult to clear, and after cutting the existing growth, set fire to it. The peaty soils of the Everglades are flammable, however, and in many cases the soil eventually burned down to the underlying rock, leaving a desert useless for agriculture.9 Even when the land could be successfully cleared and planted, crops failed and cattle died because of a scarcity of trace elements in the soil.10 Winter frosts and summer heat also killed truck crops.11

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Over the long term, however, the greatest threat to agriculture in the Everglades was inadequate drainage.12 Flooding caused by the 1926 hurricane

claimed more than 300 lives in the area around Moore Haven, and destroyed existing flood-control works.13 In the aftermath of the flood, it became apparent that the residents of the Everglades Drainage District, who by then lived largely by agriculture, could not afford adequate flood control.14 At this point a rational, market-based response would have been to conclude that the proceeds from agriculture in the area could not exceed the cost of making the land safe and suitable for agriculture, and to allow the land to return to a natural state.

Instead, the federal government stepped in, creating the expensive and ecologically disastrous Hoover Dike around the southern shore of Lake Okeechobee and turning over control of most drainage projects to the Army Corps of Engineers.15 The Corps of Engineers created a network of drainage canals to lower water levels. Since the peat soils of the Everglades are largely water, lowering the level of fresh water created problems of saltwater intrusion, soil fires, and soil subsidence. 16 In Moore Haven, for example, thirteen years of agriculture resulted in a subsidence of "approximately 45 per cent of the original depth of the soil."17

During the Depression, though, Everglades drainage control represented a way to bring needed federal dollars and jobs into Florida. Even if the state government had possessed the will or the common sense to abandon the idea of making the Everglades into farmland, the federal government was providing a financial counterincentive to economic and ecological good sense. At the same time, the general unprofitability of Everglades farming and the economic collapse of family farming during the late 1920s and early 1930s allowed a few large landowners to take over much of the agricultural land south of Lake Okeechobee. By 1929, the Southern Sugar Company controlled over 100,000 acres of this land; by 1940 its successor, U.S. Sugar, produced eighty-six percent of the region's sugar.18

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Labor conditions on U.S. Sugar's plantations during this time approached those associated with slavery.19 In this, as in almost every phase of sugar's development in the Everglades, the growers were assisted by the federal government. Locals refused to work on the plantations, a sure sign that the local labor market required higher wages and better working conditions. Using taxpayers' dollars, however, the United States Employment Service recruited workers from other areas of the South, presenting them with "the impression that a cane cutter's

life was one of comfort and luxury."20

By 1942, U.S. Sugar's abuses led to its indictment for peonage in violation of the Thirteenth Amendment.21 The indictment charged, inter alia, that a U.S. Sugar supervisor had captured three workers who attempted to escape and forcibly returned them to the plantation.22 Although the indictment was eventually dismissed,23 the mere fact that it had been brought, and the success of a separate case challenging Florida's debt peonage laws,24 made it evident that the age of widespread corporate near-enslavement of Americans was drawing to a close.25 Once again, rather than compete in the labor market, U.S. Sugar sought the assistance of the federal government. From 1943 until 1995, workers from the Caribbean were brought to Florida sugar plantations on temporary visas, where they worked under the constant threat of deportation.26 During World War II and until the end of 1947, the federal government directly negotiated employment contracts with these workers and paid the cost of round-trip transportation, a fairly substantial subsidy.27

During World War II, the United States labor market was tight, while unemployment in the Caribbean countries was high. There was thus a certain rationality to the arrangement. At least one Caribbean island with high unemployment was not involved in the program, though as one official pointed out, workers from Puerto Rico were less desirable to sugar growers, because they could not be "deported and sent home, if it does not work."28

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The temporary worker program outlasted World War II by half a century.29 The labor system continued with many of its old abuses. In one 1986 incident, for example, police dogs were set on workers protesting low wages; immediately afterwards, 300 protesters were deported and replaced with new workers.30 The

program ended only when lawsuits by underpaid cane workers 31 and the decreasing cost of mechanization had made it unprofitable for growers. One attorney representing the Fanjul family in suits brought by workers explained that "[m]achines are cheaper, they're more efficient, and they rarely sue."32

The greatest harm to the Everglades ecosystem is done by through drainage. Sugar production also harms the Everglades through habitat destruction and through run-off of agricultural chemicals. Biochemical oxidation of muck soils leads to increased nutrient discharge, in turn leading to eutrophication of the Everglades and Florida Bay.33 All agriculture in the EAA contributes to these problems to some extent, but sugar is the biggest culprit.

Ironically, sugar became the EAA's largest crop because of the man South Florida loves to hate: Fidel Castro. From the time of the Spanish-American War to the Cuban revolution, Cuban sugar (much of it from American-owned fields) enjoyed preferential treatment.34 After July 1960, the United States imported no sugar from Cuba; Cuba's quota (at that time 98.6% of the world total) was revoked in retaliation for Cuban nationalization of American-owned property.35 The ban on Cuban sugar imports can be seen as one of the many covert subsidies to Everglades sugar producers, although in this case the subsidy was more or less incidental to the foreign policy goal.

B. THE SUGAR PRICE SUPPORT REGIME

The draining of the EAA, at the expense of the taxpayers of the United States, was the first large direct subsidy from the federal government to the sugar growers. The role of the federal government in providing a cheap and compliant labor force was another. Its direct dollar value is the difference between what the sugar companies actually paid for labor during the five decades of the guest worker program and the preceding years of United States Employment Service assistance, and what it would have paid for the same amount of labor in the absence of government assistance.

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These measures served to keep growers' costs low. Over the last two decades, a protectionist quota/tariff regime and loan program have also kept sugar prices high. The price support regime, itself only a part of the total system of subsidies to Everglades sugar growers, is a structure of truly

astonishing complexity. For those who appreciate administrative complexity for its own sake, it is a work of art.36 The price support system has two main components: a loan program that guarantees a support price of eighteen cents per pound for cane sugar produced in the United States, and a tariff/quota regime that prevents world prices from being reflected in United States markets by excluding foreign competitors.

1. The Loan Program

There are more direct subsidies, as well. The U.S. Department of Agriculture loans money to sugar farmers through its Commodity Credit Corporation (CCC).37 The CCC makes both "recourse" and "nonrecourse" loans. Recourse loans are straightforward business loans, with the borrower responsible for repayment of all money borrowed.38 When imports in a given fiscal year reach 1.5 million tons, nonrecourse loans also become available. Nonrecourse loans are actually a commodity purchase program, giving borrowers the option to "sell" the sugar at a set price. Nonrecourse loans are secured only by the sugar pledged as collateral; forfeiture of the sugar satisfies the loan, even if the value of the sugar is less than the value of the money borrowed.39 Forfeiture of collateral during a crop year carries a penalty of one cent per pound, but does not disqualify a borrower from receiving additional loans in subsequent years.40

Although most CCC nonrecourse loans are made to growers, sugar loans are made to processors, because sugar cane and sugar beets must be processed before they can be stored. However, to receive the loans, processors must purchase sugar cane and sugar beets from farmers at set support prices. In the case of U.S. Sugar, at least, there is sufficient vertical integration that the distinction between grower and processor is irrelevant.41

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The nonrecourse loans thus function as a price support program, guaranteeing farmers a minimum price for their crop. The price of raw cane sugar is supported by the nonrecourse loans at eighteen cents per pound;42 the price of refined beet

sugar is supported at 22.9 cents per pound.43 By comparison, raw cane sugar outside the United States sells for about eight cents a pound.44

If the sugar price in the United States falls below the support level, the sugar standing as collateral for the loans can be forfeited, leaving the government with sugar that the market doesn't want.45 This happened on a large scale last year:46 In 1999, because of overproduction, sugar prices in the United States dropped to eighteen cents per pound. By June 2000, the CCC was buying sugar at twenty cents per pound to support sugar prices.47 The federal government then provided a payment-in-kind (PIK) program, as yet another bailout to the sugar industry.48 Under the PIK program, sugar farmers could remove a portion of their crop from production and receive in exchange sugar warehoused by the government. The maximum PIK payment to any farmer would be the equivalent of U.S. $20,000 in sugar. The PIK program would thus provide only limited direct benefit to the two giant Everglades sugar growers; rather, it was designed to help smaller sugar-beet farmers. As part of a continuing program of price supports, though, the PIK helps Everglades growers by continuing to ensure an inflated price for their output.

2. The Quota/Tariff Regime

Restrictive quotas on sugar imports keep prices high, so that Americans often pay twice the world price for sugar. For years prior to the overproduction crisis of 1999-2000, growers were able to sell raw cane sugar for 22.5 cents per pound, 4.5 cents above the support price.49

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Prior to 1982, the United States still imported about half of its sugar.50 Sugar

imports had risen from 3.7 million short tons51 in 1955(52) to 6.1 million short tons by 1977.53 During the 1980s the Reagan administration, ostensibly committed to free trade and market solutions, oversaw a tightening of the quota/tariff regime.54 Imports continued to average about five million short tons per year through 1981,55 but by 1987 had fallen to just over one million short tons.56

The current quota/tariff portion of the overall price support system is itself extraordinarily complex. It keeps prices high by restricting the entry of sugar imports, preventing foreign sugar from competing with domestically produced sugar. Defenders of subsidies point out that at the same time that United States subsidies artificially inflate the U.S. price, the actions of other governments (especially within the European Union) artificially deflate the world price. A free-market price would still be lower than the U.S. price.57 In addition, the quota scheme does not serve to counteract these subsidies; antidumping and countervailing duties against several countries serve this purpose.58

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Presidential Proclamation 6179 sets out the basic framework of the current quota/tariff regime.59 It sets up a two-tiered tariff system, replacing the previous absolute quota system. This change, although largely cosmetic, was mandated by the obligations of the United States under the General Agreement on Tariffs and Trade.60

In addition to being strictly limited in quantity, sugar imports are also taxed.61 Raw cane sugar from most countries imported within the quota is taxed at between .94 and 1.46 cents per kilogram;62 beet sugar from these countries is taxed at 3.14 to 3.66 cents per kilogram, as is cane sugar containing added coloring matter.63 The exact amount of the tariff depends on the polarity of the sugar. Cane and beet sugar from Canada, Mexico and a few other countries imported within the quota is not taxed at all.65 One of these countries is the Dominican Republic. Half of the sugar producing capacity in the Dominican Republic, and thus half of that country's import quota, belongs to the Fanjul family.66 Raw cane sugar imported within the quota (if any) from the handful of countries that do not enjoy what used to be called "most favored nation" treatment is taxed at a much steeper 2.83 to 4.38 cents per kilogram, while beet sugar from these countries is taxed at between 5.03 and 6.58 cents per kilo.67

Cane sugar imported in excess of the quota limits is taxed at 18.26 to 28.25 cents per kilo (for sugar from Mexico), 33.87 cents per kilo (for sugar from most other countries), and 39.85 cents per kilo (from a handful of countries).68 These tariffs are often greater than the value of the sugar itself, and effectively prohibit the import of sugar in excess of the quotas. Beet sugar in excess of the quota is taxed at the same rate as cane sugar if originating in Mexico, at 35.74 cents for most other countries, and at 42.05 cents per kilo for the handful of least-favored nations.69

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These direct subsidies cost American consumers nearly U.S. $2 billion dollars

per year.70 In addition to propping up the sugar-cane industry, they have created a still-expanding sugar-beet industry.71 The United States enjoys no particular competitive advantage in the production of sugar beets, yet the existing protectionist regime is luring farmers into an industry that, as soon as the price supports are removed, must surely fail.72 One sugar processor says "The U.S. sugar program is the most efficient tax we have... It comes directly from the consumers and goes directly to the growers, who turn around and give some of the money to the politicians."73 Similarly, an editorial in the Washington Post declares, "Billions of dollars have been transferred to producers, but the money hasn't been sluiced through the Treasury. Rather, the public has paid at the checkout counter."74 This hidden tax is also regressive, since lower-income families spend a proportionately higher amount of their income on food.

a. A Challenge to the Regime: Heartland By-Products

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On August 10, 2001, the world price for sugar was 7.65 cents per pound on the New York Coffee, Sugar and Cocoa Exchange; the domestic price was 21.16 cents per pound.75 Such a situation cries out for arbitrage. In the mid-1990s, a Michigan company called Heartland By-Products stepped forward to fill the niche. Heartland, a subsidiary of British conglomerate ED & F Man, buys sugar cane in Brazil and ships it to Windsor, Ontario, just across the Canadian border from Detroit.76 In Windsor the sugar cane is processed to produce a thick molasses-like syrup.77 This is trucked to Heartland's Michigan plant, where it is further refined to produce sugar syrup, which Heartland then sells for use in candy, ice cream, and cereal.78

In 1995, before Heartland began its syrup-import business, the U.S. Customs Service had assured Heartland that its syrup was not covered by sugar restrictions.79 Heartland began its imports in 1997. Sugar producers were outraged; John Breaux (D-Louisiana), a senator often identified with sugar interests,80 accused Heartland of "smuggling sugar into the country in the form of molasses."81 This was more or less true, of course, in that Heartland's syrup was designed to circumvent the protectionist sugar-import restrictions. It was not, however, illegal, and was a natural response to the price inequity. The United States Beet-Sugar Association petitioned Customs to reclassify the sugar syrup.82 No fewer than twenty-six United States senators, including John Breaux and both of Michigan's senators (Michigan is a major producer of sugar beets), signed a letter urging Customs to reverse its earlier ruling.83 Together, the twenty-six senators received U.S. $528,322 in contributions from the sugar industry between 1995 and 2000.84

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In mid-1999, Customs did reverse its earlier ruling, stating that "the classification set forth [in the earlier ruling] is not correct [and] no longer reflects the views of the Customs Service."85 The new rule, which would have shut down Heartland's business, was to have taken effect on November 8, 1999.86 On October 19, 1999, the Court of International Trade (CIT) found that the imminent closing of Heartland constituted an immediate danger of irrevocable injury.87 Further, it found that, because molasses in sugar syrup is not a "foreign substance" within the meaning of section 1702.90 of the Harmonized Tariff Schedule of the United States (HTSUS),88 Customs acted improperly in changing its earlier determination,

and the syrup was properly classified under 1702.90.40 HTSUS." Finally, it held that Heartland had not engaged in artifice or deceitful conduct in obtaining the initial Customs determination.90 Accordingly, the court found the revised Customs ruling was "arbitrary, capricious, an abuse of discretion, and otherwise not in accordance with law."91

Rule 59 of the rules of the CIT permits a party to move for reconsideration of an adverse determination,92 and the United Staes Beet Sugar Association did so. THe CIT denied the motion, finding that its original decision was not flawed or erroneous.93 The defendants have naturally been reluctant to appeal the decision., sine the decision would probably be affirmed on appeal, seriously damaging Bif Sugar's position in future lawsuits. The matter has preceeded no further in the courts, and the two Heartland decisions are thus chiefly of interest to specialists in the rather arcane field of customs law,94 and to those intersted in sugar. They have not attractd nearly as much attention from environmentalists as they should.

Senator Breaux and his supporters have not abandoned their crusade against what they call "stuffed molasses." Senator Breaux has twice tried to amend the existing tariff regime to exclude Heartland's syrup, first as a rider to the Africa-Carribean Basin Initiative bill95 and later as a rider to a community-- renewal bill.96

b. Protectionism, NAFTA, and the WTO

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Changing the existing tariff schedule, as Senator Breaux and his supporters wish to do, would have international as well as domestic implications. Canada has already said that it would view such a change as a violation of the World Trade Organization (WTO) agreement and would initiate proceedings against the United States under the WTO's dispute-resolution provisions.97 In fact, Canada

had already taken action in response to Customs' original turnaround on Heartland's syrup.98

Nor is Canada the only major trading partner of the United States to be unhappy with the existing sugar regime. Mexico, itself a major sugar producer, has asserted its right under the North American Free Trade Agreement (NAFTA) to export its surplus sugar production to the United States. This surplus - about 600,000 tons - would equal about 7.5% of United States sugar production.99 The United States, however, has previously restricted Mexican sugar imports to 25,000 tons per year.100 Under the terms of NAFTA, it would seem that Mexico should be able to export its entire surplus to the United States. The United States claims that a side agreement limits Mexico's quota for the year beginning October 1, 2000 to 116,000 tons.101 Mexico has submitted the dispute to a NAFTA arbitral panel.102

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In any event, restrictions on Canadian and Mexican sugar imports can protect the sugar growers only temporarily. Under NAFTA, all barriers to exports and imports of sugar among the three NAFTA states should be removed in 2008.103 This will weaken the protectionist regime, but will not undermine it completely, as Mexican and Canadian surplus sugar production is insufficient to meet U.S. demand. The price of Mexican sugar is also artificially inflated by a protectionist regime.104 Even if both countries dramatically increase production, as they probably will if assured unlimited access to the U.S. market, U.S. sugar prices will not be brought close to world prices.

Everglades sugar growers will do what they can to stop even this limited removal of trade barriers from happening, though. U.S. Sugar executive vice president James Terrill has already urged that this provision of NAFTA be renegotiated, and has enlisted at least one United States representative for the cause. Disingenuously Terrill says that a common sugar market is "clearly unwise in a world market of sugar that has a sea of subsidies and total market distortions, overproduction in some places that shouldn't be producing sugar."105

c. Domestic Backlash and Efforts to Protect the Everglades

Heartland produces about one per cent of the sugar produced in the United States.106 The sugar growers' reaction to the perceived threat, though, is not excessive; they are aware that their profits depend on protectionism, and Heartland represents a crack in the regime that has protected them for the past six decades.107 Environmental concerns aside, Heartland is not without its own allies, however, chiefly manufacturers of sweetened food products: The Independent Bakers Association, the Chocolate Manufacturers Association, the Confectioners Association, the Consumer Federation of America, and the Grocery Manufacturers Association.108 In Chicago, for example, Brach's Confections plans to shut down its candy factories and manufacture candies abroad, not because of labor or environmental regulations, but because American sugar is too expensive.109

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Sugar is a non-partisan, or at least bipartisan, issue. Sugar subsidies enjoy support from Republicans and Democrats alike, and sugar growers contribute heavily to candidates from both parties. Sugar's opponents are equally bipartisan. Former Senate Agriculture Committee chair Richard Lugar (R-Indiana) says "Events of the past year indicate that the sugar program is becoming increasingly unmanageable and that radical reforms are needed urgently."110 Chicago Mayor Richard Daley, a prominent Democrat,111 favors a complete end to sugar subsidies.112 Rationally enough, most elected officials' stance seems to depend

on whether the businesses within their districts are net producers or net consumers of sugar.

Attempts to fight the damage to the Everglades with additional non-market solutions and even heavier government intervention also have a long and unsuccessful history. Dexter Lehtinen's celebrated lawsuit113 eventually fizzled out, leaving the Everglades as endangered as ever.114 Bruce Babbitt's appointment as Secretary of the Interior, initially hailed as a triumph for environmentalists and environmentalism, led to a settlement that pleased no one but sugar growers and helped the Everglades not at all.115 Al Gore's bold talk of a one-cent-per-pound tax on sugar cane growers116 ultimately led to an angry - and apparently effective - thirty-minute phone call from Alfonso Fanjul to thenPresident Clinton.117 After five years, yet another "compromise" Everglades restoration plan has failed to restore the Everglades and amounts to little more than an additional bailout for sugar growers.118 Perhaps the brightest hope of all, the proposed Sugar Stabilization Act of 1989, was never enacted.119

111. CONCLUSION: BAD ECONOMICS IS BAD FOR THE ENVIRONMENT

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Environmentalists have a distressing tendency to view economists as enemies.120 Yet many environmental problems, such as pollution, result from the

simple absence of an effective mechanism to compel the problem-causer to internalize externalities. Others, such as the ongoing destruction of the Everglades, are the result of government intervention to prevent the market from removing the destructive businesses.121 Without the existing protectionist regime, sugar industry revenues would fall by up to U.S. $2 billion per year. Without the construction and continuing operation of the elaborate and costly EAA drainage system, sugar cane could not be grown in the EAA at all. The federal government can solve a large part of the Everglades problem through inaction. Simple passivity - that is, refusal to impose and enforce price supports and a protectionist quota/tariff regime - will bring about the gradual demise of sugar production in the Everglades. An active solution - undoing the EAA drainage project - would have a one-time cost, but would speed that demise and eliminate the danger that some other crop might replace sugar cane in the EAA.

The end of the sugar plantations in the Everglades should not be mourned. Sugar in the Everglades is not truly an industry, but a con game; as a nation we have been convinced to pay nearly three times as much as the rest of the world for sugar, producing an unnecessary surplus when all of our needs could easily be met by low-cost imports. Sugar is not that important a product; there is no national security interest in maintaining a domestic supply. In fact, sugar, although not as bad as tobacco, is a harmful product; it causes tooth decay and is linked to a host of health problems, including obesity and diabetes.

Nor would the growers be severely harmed, unless the reduction of profits to levels experienced by other sectors of agriculture can be counted as harm. Flo-Sun would be able to import and sell all of its Dominican sugar in the United States. U.S. Sugar would be similarly encouraged to move its production to less environmentally sensitive areas.122 Elsewhere, sugar beet farmers would switch to other crops - often, the crops they grew before the government paid them to switch to sugar beets. In California, for example, sugar beets are only marginally, and artificially, competitive.123

Free trade has already struck a few blows against the sugar subsidies. GATT and the WTO have forced the United States to admit a few imports, and to replace the absolute quota system with a two-tiered tariff regime that has the same effect but might be simpler to modify. The decision in Heartland By-Products has kept

open a door for sugar imports outside the quota system, and NAFTA should eventually open the United States market to imports from Canada and Mexico.

This is a start, but not enough to save the Everglades. Only a truly free market in sugar will do that. The sugar subsidy program's next major point of vulnerability will be at the end of 2002, when the 1996 Farm Bill expires.124 Before that time, of course, it will inevitably be renewed, but perhaps there is a chance that it can be renewed without insanely generous subsidies for sugar producers. Turning off the spigot that keeps money flowing to the sugar growers will make it possible to turn on the flow of water from Lake Okeechobee to the Everglades.

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Globalization of trade, seen by some environmental activists as an undiluted evil, is perhaps the only means to save Florida's Everglades. While demand for sugar may remain constant, resulting in more sugar production elsewhere, not all sugar-producing regions are as environmentally sensitive as the Everglades. While it may be naive to hope that removing trade barriers will always lead to environmentally beneficial results, in the case of the Everglades, such action will.

AUTHOR_AFFILIATION

AARON SCHWABACH*

AUTHOR_AFFILIATION

* Professor of Law and Director of Center for Global Legal Studies, Thomas Jefferson School of Law; J.D., Berkeley (Boalt Hall) 1989; e-mail aarons@tjsl.edu.