EU sugar proposal
Guyana stands to lose US35M annually
------CEO of SAC Ian Mc Donald
Kaieteur News
June 30, 2004
There is heightened concern between the African, Caribbean and Pacific (ACP) sugar producing countries in the wake of severe proposals by the European Union. These proposals, if accepted, will have severe impact on the ACP sugar producing countries particularly the least developed ones with vulnerable economies like Guyana. The biggest threat, which the proposals represent, is the loss of revenue amounting to over US$90M per annum in the region.
Guyana’s sugar industry, with its restructuring and massive diversification in place, will be deeply affected with an estimated loss in the reduction of revenue reaching US$35M per annum.
The Sugar Association of the Caribbean and other major stakeholders strongly condemn these proposals and said that the proposals to change the European Union (EU) sugar regime without regard for the real needs of the Caribbean and other ACP countries is in clear contravention of the EU’s commitments under the Cotonou Agreement to safeguard the benefits of the Sugar Protocol.
According to Mr. Ian Mc Donald, Chief Executive Officer of the Sugar Association of the Caribbean, “The most unacceptable element is the proposal to introduce a 20 per cent price reduction in 2005 and reaching 33 per cent within two years.
“This cuts right across the reassuring guarantees given by the EU that any changes would be gradual and designed to avoid severe disruption to ACP economies.”
He added that what seems to be very wrong is that the proposals talk a lot about how the EU sugar producers will be affected by these reductions and what should be done to compensate them.
Mr. McDonald said that all that is being proposed as compensation for the region is some sort of scheme, which has failed in the past on other commodities. This, he argued, is wholly unacceptable and must be strongly challenged.
“One of the things that I find very outrageous is that it seems to me that the European Union is showing extremely bad faith with these proposals.”
In the Cotonou Agreement signed between the EU and the ACP countries, in clause 36:4, it is clearly stated that Sugar Protocol has a legal status of its own and in reviewing the Protocol, the EU will do so with a view to safeguard the benefits.
“But here we have proposals which far from safeguarding the benefits of the Sugar Protocol, affects most seriously the benefits of price. The EU has always said that it supports the development needs of vulnerable countries like ours in trade negotiations and yet, here we have something that goes very much against development.
“It’s going to be such a severe blow to one of the biggest agricultural industry, which accounts for the livelihood of probably three quarters of a million people in the Caribbean.”
What is being done to press a strong rejection of these proposals? “At the industry level we are in close touch with our Caribbean counterparts and with the colleagues in the ACP region to register our outrage at these proposals.”
Governments across the region are fully involved, and the matter will be discussed at the COTED meeting in Grenada on Friday, and then forwarded to the upcoming Heads of Government Meeting. The severity of the issue will also engage the attention of the Director General of the Regional Negotiating Machinery (RNM).
Mr. McDonald said that he is quite sure that the governments along with the RNM will strongly defend their case. He questioned where the EU is going with these proposals, whether it is just a kite flying exercise to see how people would react, or is it really serious.
“We have to see how the European producers react to these proposals, because many of the 25 countries in the European might very well reject the proposals, and if the ACP region lobbies with these producers, then ultimately the EU will have to re-consider them”.
But why did the EU make such a move? According to McDonald, the EU had said quite a long time ago that sugar forms part of their Common Agriculture Policy Reform and needed to be put in line with the other commodities.
He added that a tremendous amount of pressure to change the sugar regime results from the feeling that the price for ACP sugar is much too high compared to the world price for sugar. Many people are carried away, he said, since the world price is a dump price and completely artificial”.
The Sugar Association of the Caribbean contends that these proposals give priority to the demand of huge, rich, corporate industrial users of sugar for lower prices and ignore the needs of developing countries for stable and remunerative income.