U.S. trade representatives say they took the sugar industry's concerns to heart by striking a deal that would keep sugar imports from the foreign countries at below 1.5 percent of total U.S. sugar consumption over the next 15 years. They also emphasized that the agreement will expand economic opportunities for U.S. farmers and exporters of feed grains, rice, beef, pork, poultry and other commodities.

Hawai'i sugar farmers, however, said that if Congress ratifies the agreement, it may set a precedent for other trade negotiations that could collectively push prices down and put an end to U.S. sugar farming.

"It will literally force domestic producers out of business," said Alan Kennett, general manager for Gay & Robinson.

The company grows sugarcane on 11,000 acres on Kaua'i and is one of two remaining sugar companies in the state, along with Hawaiian Commercial & Sugar Co. based on Maui.

"The future certainly does not look bright for the Hawai'i producers," Kennett said.

The trade negotiations started in January and were aimed at strengthening ties with the impoverished Central American region. Costa Rica withdrew from the negotiations Tuesday after objecting to opening its telecommunications and financial services sectors to foreign investment.

Of all the domestic producers, Hawai'i would be most threatened because of its high costs for shipping and refining sugar.

The agreement would "lower prices, and once you get below your cost of production, it's hard to stay in business," said Dalton Yancey, a lobbyist for sugar producers in Hawai'i, Texas and Florida. "This might be the last blow."

Domestic sugar producers also worry that they cannot compete against foreign growers who receive government support.

"It's hard for us to compete against foreign governments," Kennett said.

The sugar industry generates about 800 jobs in Hawai'i. The agreement comes as sales of Hawai'i sugar rose 11 percent last year to $64.3 million following decades of decline.

Although the amount of sugar permitted initially through the U.S.-Central American Free Trade Agreement — 85,000 tons annually — is relatively small compared to sugar consumption nationwide, the cap will grow by about 2 percent a year. The tonnage will be in addition to the 111,000 tons allowed into the country under a World Trade Organization quota.

"We believe that it's manageable for our farm program," said a U.S. trade official who gave a background briefing to reporters yesterday.

But the Hawai'i sugar industry's concern is that the Central American agreement will form the basis for regional and bilateral trade discussions with Australia, Thailand and South Africa, which also produce sugar.

"This agreement in and of itself, if that's all they did and they didn't give anything away to any other country, we could probably live with it, but to me this establishes the framework for all the other agreements," Kennett said.

Comparable increases for other countries could result in a near doubling of U.S. imports of sugar — equivalent to about 12 to 15 percent of U.S. production, according to the sugar industry.

If it were to happen, "it puts Hawai'i out of business," said Yancey, the sugar lobbyist, who characterized that level of imports as "death by a thousand cuts."

But the U.S. trade official said "each negotiation is unique."

"It's going to be important that the sugar guys engage with us," he said. "We want to work with our industries."

That's little assurance to Kennett, who says that when he arrived in the Islands in 1976, there were 18 sugar factories here. The number hasdwindled to the two as sugar prices stagnated. "It's extremely difficult for the remaining companies," he said.

Kennett worries that additional imports could drive U.S. commodity prices for sugar down below the 18 cents a pound today.

Hawai'i sugary industry and government officials attempted to convince the Bush administration to keep the domestic sugar industry protected. About 490 employees and retirees of Gay & Robinson signed a petition sent to Gov. Linda Lingle this month opposing the Central American agreement.

Kennett said the sugar industry will be lobbying extensively next year when Congress is asked to ratify the pact.

Lingle also sent a letter to President Bush asking that sugar remain exempt from the free trade negotiations, but the bid was unsuccessful.

"Hawai'i sugar companies have lots of challenges going now ... ," said U.S. Rep. Ed Case. "Hawai'i, as one of the smaller producers, cannot afford to see any erosion in its profit margin."

The sugar industry said it would prefer trade issues be addressed by the World Trade Organization rather than through separate bilateral and regional trade agreements.

Looking ahead, Kennett is considering converting all of his sugarcane into ethanol and is trying to start a pilot project to study the feasibility of the project.

"That would be our savior," he said.