TRINIDAD’S LOME SUGAR QUOTA MAY BE IN DANGER

A substantial portion of this country’s preferential entry quota of raw sugar to the European Union EU under the Sugar Protocol of the Convention of Lome may be in danger of being lost unless the cane-weighing scales issue can be resolved before the start of reaping of the 2004 sugar crop. In turn, the preferential entry of Trinidad and Tobago sugar to the United States of America may also be under siege. Under the Lome Sugar Protocol should Trinidad and Tobago be unable to supply the European Union with its full assigned quota in any one year, unless it can argue and prove “force majeure,” for example natural disasters such as hurricanes and/or droughts, the EU reserves the right to diminish the allocated quota by the amount by which this country has fallen short.
 
Six years ago, in 1998, overall sugar production in the Caribbean Community of Nations fell somewhat because of what were drought conditions, and the Region’s sugar exports to the European Union declined correspondingly. The decline had clearly been beyond the ability of the region’s Governments to prevent, and had been classified under the heading of “force majeure.” Should Trinidad and Tobago’s shortfall this year be 20,000 metric tonnes, for example, as a result of a significant proportion of the cane-weighing scales not being manned, this is hardly likely to be judged by the EU as an “unforseeable course of events”. It may then slash Trinidad and Tobago’s quota permanently by 20,000 metric tonnes!  Meanwhile, the EU reserves the right to re-allocate the shortfall to other ACP countries. Should this happen, and Trinidad and Tobago is in turn not able to supply its quota of raw sugar to the United States of America it may lose this preferential entry quota as well. There will be a third minus. Sugar producing States of the Caribbean Community of Nations benefit through a supplementary quota, listed by the EU, to supply Finland and Portugal with sugar, again under the Convention of Lome.

Last week, the Trinidad Islandwide Cane Farmers’ Association, which controls more than 80 per cent of the cane-weighing scales advised the Sugar Manufacturing Company of Trinidad and Tobago (the successor company to Caroni (1975) Limited) that it was no longer interested in doing so. Earlier, a rival group, the Cane Farmers’ Association of Trinidad (CFAT) had challenged the award of the management of the cane-weighing scales to a TICFA co-operative, the Direct Delivery Cane Farmers Co-operative Society. According to Wayne Inniss, Director of Virgo Consultants Limited, which has been contracted by the Sugar Manufacturing Company of Trinidad and Tobago to assist in the restructuring of the sugar industry, CFATT had at first declined  to participate in the operating of the cane-weighing scales, but later said it would do so provided it was allocated the majority of the scales. It had moved from opposing TICFA’s operation of the majority of cane-weighing scales to demanding the right to operate the majority it had sought to deny to TICFA.

Last week as TICFA announced it had decided to surrender its control of the majority of the cane-weighing scales, CFAT declared it could not assume management of the scales “at this eleventh hour’” and asked instead that the Sugar Manufacturing Company re-introduce the Cane Farming Department of the recently closed down Caroni Limited. CFATT’s position puts Government in a particularly awkward position. If it should accede to the request of the Cane Farmers Association, then it can open itself to the charge, which can be exploited politically, that it had acted unwisely  in the closure of Caroni (1975) Limited. However, should it decline what may appear to it as possible partisan political bait, then it runs the proverbial risk of not being in a position to supply a substantial portion of its contractual obligations under the Convention of Lome. Should this happen and Government loses an equivalent tonnage of sugar permanently,  allotted to it as its preferential entry quota of raw sugar to the EU, it would lose valuable foreign exchange earnings. Government may be able, however, to acquire sugar from Guyana, and/or another CARICOM country, equivalent to its shortfall. The question though would be one of price. Would Guyana be prepared to sell Trinidad and Tobago raw sugar at the world price, which is substantially lower than that obtained under the Convention of Lome, or would it settle at a figure midway between the two?
 
Guyana may see itself in the driver’s seat, or because of this country’s forgiving more than TT$3 billion of Guyana’s debt to it in the 1990s, albeit under pressure from the Paris Club of creditor nations, it may decide on a sympathetic approach.  Or with the need to have a ready Trinidad and Tobago market for its sugar, what with the around the corner end of the Convention of Lome, its approach may be pragmatic. But there is another side to the equation.

Should there be a shortfall in Trinidad and Tobago’s sugar production, and because of this a falling short of its ability to supply the European Union (in reality the United Kingdom) with its quota of sugar for 2004, then employing the Barbados experience of the 1990s it may regard itself in a position to advance the argument of “forcre majeure”. When a few years ago, Barbados was unable to meet its quota of raw sugar — “White Sugar Equivalent” — because of industrial action taken by workers, it pleaded “force majeure” and won! The industrial action, it argued, had been an unpredictable course of events, over which clearly it had no control. It is a matter of history that Barbados won its case for “force majeure,” and suffered no loss of the relevant part of its quota. For the time being though should fewer of the cane-weighing scales be manned Trinidad and Tobago should consider the relevant part of its preferential entry sugar quota to the European Union, as being in danger, potential danger at least.