What kind of a hold do these people have over the government?

Under the framework rules just negotiated in Geneva, countries are allowed to shield "sensitive" products from liberalization to some extent.

Big sugar is in line for shielding: Today the "PR Newswire" reports that, "A top government trade policy official told an international sweetener industry conference that the United States is "very likely" to designate sugar as a sensitive product in the Doha Round of World Trade Organization negotiations..." The rest of the story is here: "U.S. Official Tells International Sweetener Symposium: U.S. Very Likely to Designate Sugar as Sensitive Product in WTO"

Kenneth Dam writes,

"Sugar production constitutes an extreme but illustrative case of the lengths to which governments have been persuaded to go in supporting domestic agricultural production. It also illustrates why the notion of deep proportional reductions in support would face strong interest group opposition even in the United States. In chapter 1 we saw that the sugar industry involved an iron triangle of interest group, Executive bureau, and congressional committee. In 1981 President Reagan agreed to impose quotas on sugar imports in order to effectuate a congressional decision to set a minimum domestic price for raw sugar at a level more than twice the world price. The beauty of the quota arrangement from the standpoint of each angle of the iron triangle...was that domestic sugar growers would have their incomes enhanced without the necessity of appropriating any funds. The resulting sugar program added "another $3 billion a year to American consumers' grocery bills," according to a 1988 Commerce Department study. A General Accounting Office study found that in 1998 the direct gain to the sugar industry was $1.6 billion. But the impact is more complicated than appears because the sugar program generated a further implicit subsidy to corn farmers, who were able to sell more corn for use in high-fructose corn syrup, "which is profitably sold to soft-drink bottlers because domestic sugar prices are propped up so much." Thus, the sugar program acquired a second domestic constituency and further diminished the efficiency of both domestic agriculture and international trade."

Kenneth Dam, The Rules of the Global Game, page 111)

The text of the framework agreement on sensitive products reads:

"Sensitive Products

Selection

31. Without undermining the overall objective of the tiered approach, Members may designate an appropriate number, to be negotiated, of tariff lines to be treated as sensitive, taking account of existing commitments for these products.

Treatment

32. The principle of ?substantial improvement? will apply to each product.

33. ?Substantial improvement? will be achieved through combinations of tariff quota commitments and tariff reductions applying to each product. However, balance in this negotiation will be found only if the final negotiated result also reflects the sensitivity of the product concerned.

34. Some MFN-based tariff quota expansion will be required for all such products. A base for such an expansion will be established, taking account of coherent and equitable criteria to be developed in the negotiations. In order not to undermine the objective of the tiered approach, for all such products, MFN based tariff quota expansion will be provided under specific rules to be negotiated taking into account deviations from the tariff formula."