Sugar in death dance


Despite some cracks in the EU over the proposed 39 percent cut in the price of sugar imported from African, Caribbean and Pacific (ACP) countries, which member states say will devastate their economies, the European Commission is still pushing ahead with its plans.


Recent discussions between government officials and ambassadors of ACP countries and ministers from EU countries including Spain, Finland, Austria and Poland showed signs that there is a division within the EU over the issue.


Some members of the EU Parliament also seem to be coming around to recognising that the ACP cannot be taken for a ride. The new trading regime is to begin next year with a five percent cut in the price that the ACP must pay to the mulinational sugar refiners, such as Tate & Lyle UK.


The EU last week rejected the latest calls from ACP sugar producers to delay proposed reforms to its sugar import policies. A senior EU official attending a meeting of delegates from the 18 ACP members said that instead of fighting the changes, the bloc should accept Brussels’ plan to offer assistance and quickly draw up plans to reform their sugar industries to qualify for it.


EU director for the economics of agriculture markets, Russel Milton, said the EU’s planned reforms were "irreversible" considering a WTO decision that found the price guarantees illegal.


"The ACP must move as quickly as possible and put in place safeguards to our impending reforms because they are irreversible. Our reform agenda must go on as planned despite the hue and cry because we are bound by the decision."


"We are very much aware of the fears of the ACP industry, but the players must be prepared for sweeping changes by coming up with urgent development plans to safeguards the changes or perish," Milton added.



FREE TRADE DOGMA


Guyana’s Ambassador to Brussels, Dr PI Gomes told Business Day that the EU was using the WTO ruling against export subsidies and avoiding its obligations under the 1975 Sugar Protocol of indefinite duration to purchase imported sugar at a negotiated price from ACP countries.


"The politics of EU sugar reform is showing that now they’ve sucked the ACP dry, they are ready to say survive as best you can. It is the worst form of the so-called free trade dogma now being unleashed on the developing countries by deals the developed countries are willing to strike with each other in order to satisfy WTO regulations," Dr Gomes said.


The European Commission’s plan for growers of beet sugar is to cut the guaranteed price by 39 percent over four years from 2006 and offer a voluntary compensation scheme for producers forced out of business by the price cut.


The reform is expected to hit ACP countries hard, with estimates suggesting the 18 nations, which annually export 1.3 million tonnes of sugar to the EU, will lose some 400 million euros (US$480 million ) a year.


Although the EU reform includes a plan to earmark 40 million euros to help ACP sugar producers, many in the bloc believe the envisaged amount is far too small and have balked at conditions attached to the aid.


SMOKE SCREEN


Guyana’s minister of foreign trade and international cooperation, Clement Rohee, criticising the EU’s justification for its proposals, said the commission was relying excessively on price cuts as a management tool, discriminating unfairly against traditional cane sugar suppliers, who are least able to withstand such a price shock.


Rohee was among ACP Sugar Protocol supplying states and representatives of Least Development Countries (LDCs), which met with EU agriculture ministers and the European Commission recently to discuss the commission’s proposed reform of the EU sugar regime.


Rohee called instead for a trade-based solution to reform, which would involve a managed market, including improved access for countries able to supply additional quantities; a realistic time-line of eight years from 2008 to phase in the new sugar regime; and an adequate level of price, with any price reduction not going beyond the EU’s obligations in the WTO.


"Nothing justifies this level of price cut. Talk of WTO pressures and the threat of EBA (Everything But Arms) is nothing but a smoke-screen. There is a total lack of balance and equity in the commission’s approach and the ACP, as the most vulnerable stakeholders, will bear the burden of the reform and most of the pain," the Guyanese minister said.


In a joint statement, the ACP and the LDC sugar groups said while they recognise the need for the reform of the EU sugar initiative, they want reform that is just and equitable to all stakeholders.


"EU sugar reform should moreover ensure coherence between the EU’s own policies on trade, agriculture and development cooperation and be respectful of the provisions of the Sugar Protocol and the EBA initiative," the groups said.



UNFAIR TREATMENT


Outside the meeting, Oxfam International and World Wildlife Foundation (WWF), the global conservation organisation staged a protest to highlight the unjust treatment of sugar farmers in the developing world.


"Today’s protest was designed to show just how unfairly the EU is treating the developing world’s sugar producers. The EU reform plans are skewed massively in favour of large-scale European producers and big processing companies, they will destroy sugar industries in poor countries, on which millions rely for employment," said Luis Morago, Head of Oxfam’s Brussels office.


"Europe says it is in favour of using trade as a tool for poverty reduction but their unbalanced sugar reform proposals demonstrate just the opposite. Some of the very poorest countries in the world stand to benefit from trade in sugar but the EU is about to undermine this potential with its blunt and selfish reform package."


More pressure was put on the EU when CARIFORUM Trade Ministers from the Caribbean including Haiti and the Dominican Republic and EC officials met in Saint Lucia later this week to review progress in Phase II of Economic Partnership Agreement (EPA) negotiations, among others.


Urging Caribbean people to take a stand, CPDC said the EU restructuring process under the aegis of WTO compatibility has devastated both the sugar and banana industries in the Caribbean,


destroying thousands of livelihoods and potentially disrupting the social and economic fabric of our societies.


Dr. Gomes, who has been steadfast in his opposition to the EU’s proposed sugar cuts said pressure must continue on the EU since the lives of millions of people are at stake while Europe hides behind the WTO.


"This is blatant injustice and the kind of trading arrangement that ensures persistent poverty, at the very time when the developed countries are making fancy speeches about poverty reduction in the Millennium Development Goals at the UN.


"A world trading system that is built on domination of the primary producers of agricultural commodities cannot bring about global peace and international security."

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"Sugar in death dance"

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