The Dominican U.S. sugar quota is now 41,411 metric tonnes, as a result of the decision by the Philippines not to accept the increase they were allotted. While it is believed the increase in the preferential quota will mean more hard currency being earned, as a large part of the sugar will be sold for US$0.22 and not at the US$0.11 world market price, the larger quota will impose new difficulties on local industries that use refined sugar as there will be less available on the local market. It is expected that Central Romana will benefit most from the increase in quota, given the collapse of the state sugar producing Consejo Estatal del Azucar.
Local industries that use sugar are currently seeking the freedom to import at world market prices. The government has been giving protection to the local sugar industry, composed of the state and two private producers, to the detriment of companies that manufacture sweets, juices, soft drinks, ice cream, baked goods, etc., who have had to purchase sugar at black market prices.
It has been said that the government seeks to provide incentives to the sugar industry so that new companies may enter the market, bringing competition to the present oligopoly. But, in the process, local manufacturers are being hurt by the difficulties in importing sugar and by the new tax structure that the government is promoting under GATT, whereby it is seeking an increase of 100% in the tax on imported sugar.
The private producers of products using sugar as a raw material say they will take the matter to the World Trade Organization, claiming that the new high tax increase will reward the “inefficiencies” of local producers.