The African Caribbean Pacific (ACP) grouping has suggested the establishment of a Competitiveness Fund in advance of reductions in earnings due to the European Commission (EC) sugar reform proposals and other reforms.
A release from the ACP Secretariat also said the implementation period of the reform process should not be less than eight years.
Unanimous in their view that the EC proposal on sugar, in its current form, would devastate their sugar industries, the ACP states welcomed the EC offer of an open and structured dialogue on the reform proposals and the preparation of a plan of action in favour of the ACP states.
The ACP sugar supplying states, signatory to the sugar protocol, met in Brussels this week to develop a submission in response to the EC's proposals released on July 14 on the reform of the sugar regime.
The release said they noted that compensatory mechanisms have been provided in situations where operations are not economically viable and the ACP, which is in a similar situation, should benefit from comparable treatment. Under the EC proposals, the outermost regions of the EU would benefit from special treatment, which take into account their agriculture and sugar industry and their logistic situation in relation to the EU market.
In addition to the ACP's unanimous view, the sugar exporting countries of the Least Developed Countries (LDCs) grouping have indicated that their legitimate expectations from the Everything But Arms (EBA) initiative would be frustrated due to the proposed reform.
The release said the ACP states recalled that the Sugar Protocol is an inter-governmental agreement with obligations to be met by all contracting parties. The European Union's obligation is to respect the commitments enshrined in the protocol in terms of three guarantees - prices, access, and indefinite duration.
The ACP countries noted the severity of the price cuts and timeframe for their implementation, and the dismantling of the intervention mechanism, as proposed as being totally unacceptable. They were seen as a breach of the obligations enshrined in the protocol and an impairment of benefits with dire consequences on employment, investment, rural development, food security, protection and preservation of the environment.
They reaffirmed that all losses due to price cuts should be compensated with an automatic and predictable mode of disbursement. Of critical importance in the implementation of any adjustment programme, they said, was that fund disbursement must be simple, timely and recurrent. They said that resources relating to the suggested Competitiveness Fund and compensation for price reductions should be separate and distinct from each other and separate, too, from the European Development Fund.
The release said the ACP and LDCs regretted that the proposal of March 3; LDCs proposal calling for an adoption of the EBA initiative through increased access with a second-tier quota up to 2016 as against quota-free access, has been ignored by the EC.
The LDCs feel that it is crucial to maintain an orderly market arrangement and secure a guaranteed high remunerative price, otherwise the commission's proposals would only benefit industrial users of sugar in the EU and large multi-commodity exporters.
The ACP countries welcomed the EC plan to continue to limit isoglucose production and to restrict access from the Western Balkans as well as the provisions for avoiding distortion of competition between the LDCs and the ACP.
They noted the reference in the Cotonou Agreement to the parties' need to safeguard the benefits of the sugar protocol bearing in mind its special legal status.
They further noted the reaffirmation by the EC of the EU's commitment to buy annually at a guaranteed price the equivalent of an agreed quantity of 1.3 million tonnes of white sugar. They emphasised that access without a remunerative price was meaningless.