Guyana's Minister of Foreign Trade and International Cooperation, Clement Rohee, who was part of an African, Caribbean and Pacific (ACP) trade ministers lobbying mission to Brazil recently, yesterday reported the development.

He told a news conference at the Ministry of Foreign Affairs in Georgetown that on their arrival in Brazil last weekend, mission members were informed that the Brazilian government had taken a decision to pursue the matter at the level of the WTO.

Rohee said while he is disappointed at the position of Brazil, there were some positive outcomes and that "all is not lost".

He reported that Brazil has indicated its desire to find a resolution to the issue and several proposals have been put forward for consideration with the aim of resolving the matter outside the realm of the WTO to the satisfaction of all the affected parties.

However, he did not elaborate, pointing out that the proposals are still at the stage of negotiations and it would therefore be violating principles of protocol to expand on them.

"It is most unfortunate that we were apprised during the course of a meeting we had with the Minister of External Affairs of Brazil that a decision in principle had been adopted to take the challenge to the Dispute Settlement Body of the WTO.

"However, at the same time, the Minister declared that Brazil was prepared to examine and consider any proposals by the EU to resolve the issue. Notwithstanding this decision, the ACP is still hopeful that consultations between the parties will be ongoing and that a satisfactory solution can still be found which will bring a halt to the whole exercise," Rohee said.

He also noted that during the visit to Brazil there were useful meetings with the acting Ministers of Agriculture, Trade and Commerce and External Affairs.

When the matter reaches the WTO dispute panel, it becomes legal and as such, one of the immediate tasks of the ACP is to procure legal services to represent their interests, he added.

Responding to a suggestion that it was insultive of Brazil to announce that it would pursue the matter at the WTO, knowing of the imminent arrival of the ACP delegation, Rohee's response was: "I would think it was insensitive. That is all I would say."

On the lobbying of Australia which, together with Brazil is jointly challenging the EU sugar regime, Rohee said it is being actively pursued and in this regard, the Prime Minister of Jamaica has written the Government of Australia, while the Fijian Trade Minister is engaging his Australian counterpart.

He, however, expressed the view that Australia is adopting a 'wait and see approach', and is likely to follow whatever position the Brazilians adopt.

Trade Ministers from the ACP countries mounted the lobbying mission in connection with safeguarding their preferential sugar export markets to the EU.

ACP Ministers, members of the Enlarged Bureau of the ACP Sugar Group, mounted the mission February 6-8.

The Ministers were led by Chairman of the Group, the Mauritian Minister, and included his colleagues from Fiji, Swaziland and Minister Rohee.

The mission was undertaken against the background of Australia and Brazil challenging EU export subsidies for sugar and the payment of a subsidy in the form of the intervention price for refined European Community (EC) sugar. This is not available to sugar imported from non-preferential sources.

The challenge could have adverse effects on the sugar exports of ACP countries, including Guyana, to the EU.

Earlier, Commercial Representative of the Guyana Sugar Corporation (GUYSUCO) to London, Dr. James Matheson explained that the lobbying mission was part of the initiatives being undertaken by the ACP Sugar Group to avert the possible adverse effects stemming from the challenge.

He added that the challenge had already passed through the first stage of a process, that of informal consultations between the complainants (Brazil and Australia) and the EU and the ACP states have joined as third or interested parties.

Matheson noted that despite assurances given to the ACP by Brazil and Australia that they intend no harm to the preferential arrangements for sugar, a major objective of the lobbying efforts was to persuade Brazil to reconsider the referral to the panel in the context of possible harm that could be done by a successful challenge to the ACP producers.

Matheson also cautioned that similar assurances were given by the Americans and Latin American banana producers when they challenged the preferential regime on banana, but the end result was catastrophic for the Caribbean's banana industry.

Adviser to GUYSUCO, Dr. Ian McDonald also emphasised that the EU preferential market is of grave and essential importance to the survival of the Caribbean's sugar industry, disclosing that 150,000 people are employed in the industry and foreign exchange totalling US$250M is earned annually from exports of sugar to the EU.

He further pointed out that Brazil, being the largest producer of sugar in the world with more than 22 million tonnes annually, will not be affected by the exports from the ACP countries which are relative small producers - representing less than five per cent of the world market.

The recently held 14th meeting of the Caribbean Community Council for Trade and Economic Development in Georgetown expressed deep concern regarding the challenge of the EU sugar regime launched by Brazil and Australia at the WTO in September 2002.

The meeting observed that if this challenge is successful, it would have disastrous effects for CARICOM countries whose economies depend vitally on their sugar industries.