Lome sugar price rises

The price in Trinidad and Tobago dollars which this country will receive this year for the raw sugar it plans to export to the United Kingdom under the Convention of Lome is set to increase as a result of the steady decline of the US dollar against the Euro. There will be a marked favourable difference in earnings, even after taking into account the rise in the cost of production, between what was received for the 46,500 metric tonnes exported in 1999, when payment in Euros began, and for the 45.000 tonnes which the Sugar Manufacturing Company (SMC) has indicated it will export this year. An additional plus will be the increase in the guaranteed price, which has risen in the intervening six years.

For while the price paid for Trinidad and Tobago raw sugar, “White Sugar Equivalent,” in 1999 was 523.7 Euros per metric tonne the current price, as stated by SMC Chairman, Prem Nandlal, is 632 Euros. In turn, the Euro, which in 1999 was worth a mere US$0.98, is today fetching approximately US$1.39, due to the strengthening of the currency. This is taking place as the European Union mounts a determined bid to have the Euro replace the US dollar as the preferred international medium of foreign exchange. The Euro has had a tremendous assist by both the foreign policy planners of the United States of America and corporate US itself with its outsourcing of jobs to China, India, Mexico and other countries. The outsourcing of jobs has meant a rise in underemployment in the US and with it less money turned around within the American economy. The 2003 US adventure into Iraq in an effort to control that country’s oil and to halt the move by former Iraqi dictator, Saddam Hussein, to win Organisation of Petroleum Exporting Countries (OPEC) over to acceptance of payment for their oil in Euros, as opposed to the US dollar, has had its price.

The European Union, the world’s largest free trade bloc of nations, has seen its trading within the bloc governed principally by Germany, France and the United Kingdom. The three nations have steadily expanded their inter-European Union and other international markets somewhat at the expense of the United States. In addition, the EU has widened its European boundaries and in the short and medium term this will lead to a further contracting of US export markets. All of this has led to a strengthening of the Euro vis a vis the United States dollar and the increase in earnings for this country’s raw sugar exports to the European Union under the ACP-EU Convention of Lome which saw dawn on February 28, 1975. Another product beneficiary, re Trinidad and Tobago, has been rum which, like raw sugar, enjoys preferential entry.

The irony is that the increased earnings’ benefits for this country have come too late. The United States has successfully challenged the preferential entry of sugar before the World Trade Organisation after demanding that the European Union abolish what are in effect subsidies granted our sugar, and of other relevant ACP nations. By next year, or 2007 on the outside, Trinidad and Tobago and other ACP countries, such as Barbados, Fiji, Guyana, Jamaica, Malawi, Mauritius, Swaziland and Tanzania will have the EU’s door to preferential entry of sugar closed for good, courtesy of the United States and the World Trade Organisation. Three Protocols, under the original African, Pacific, Caribbean-European Economic Community Convention of Lome signed on February 28, 1975 had allowed for perferential entry not only of sugar and rum, but bananas as well. Not unlike sugar, bananas, exported by Jamaica and the Organisation of Eastern Caribbean States (OECS) to the EU under the umbrella of the Convention of Lome have been placed under siege by Uncle Sam.

The United States, in brutally cynical concern for American banana companies such as Chiquita, United Fruit and Dole Food Company, at the expense of OECS banana producing countries, had fought for eight long years against the right of these low income island States to exist. It was an eight-year war without pity, without remorse. The ACP countries had once been colonies of signatories to the original February 28, 1975 document. They had included such nations as Rwanda, Zaire, Uganda, Guyana, People’s Republic of the Congo, the Ivory Coast and Liberia over which the United States at some time or the other has alternated between the shedding of crocodile tears and other and more uncomfortable postures. I wish to make clear that I have written the above without bitterness, without anger. Yet I must note that there are people in ACP countries whose opportunity to earn however humble a living by way of preferentially treated exports to the European Union, whether sugar or bananas, is today shamelessly under siege. Our increased earnings from sugar have come a little too late.