TRADE: ACP States Press EU to Reverse Plan to Cut Sugar Quota

By IPS Correspondents Reprint | | Print |

Bert Wilkinson

GEORGETOWN, Apr 28 2001 (IPS) - When it was first unveiled last November, the governments of several developing countries objected to European plans to grant trade privileges to the world’s poorest nations similar to the ones they had enjoyed without challenge for decades.

In a highly controversial move, the European Union (EU) said it was throwing open its doors to 48 of the world’s Least Developed Countries (LDCs) under a newly-created scheme called the Everything But Arms Initiative (EBA).

That meant that a playing field, that had for years been set aside for the 77-nation African, Caribbean and Pacific (ACP) group of countries, was now open to others with the capacity to export rice, sugar, rum and bananas among others. These are all lifeline products for many in the ACP.

The ACP had argued that the EU was taking away from the poor to give to the poorest, instead of opening up its market without hurting member countries. The new scheme for the LDCs begins on Jul. 1.

This week, ACP sugar ministers revisited the new proposal, repeating their demands for a reversal or review of the decision to allow the LDCs such access to the EU market.

The bone of contention here has to do with a plan to take away 75,000 tonnes from the Special Preferential Sugar Agreement (SPS) and award it to LDCs.

The ACP comprises mostly former European colonies that were granted special trade deals. In the case of sugar, the sweet arrangement goes back 350 years in the Caribbean.

The 75,000 tonnes would be deducted from an annual SPS quota of 290,000 tonnes that are usually divided up among ACP states. The SPS programme is outside of, and additional to, the existing Sugar Protocol and has more to do with special exports to a few EU countries such as Spain and Portugal.

ACP ministers who met here for four-days this week, made the item a linchpin of discussions, arguing that the EU should let the 290,000-tonne cap remain in place while granting the LDC’s their own quota.

“The EBA is one of the horror stories of the year for sugar,” said Alan Forster, Chairman of the London-based Booker Overseas Trading Limited. If the EU goes ahead with plans, it would erode the benefits we get from the SPS, Forster told IPS.

EU ministers earlier this month looked at the ACP objection to the EBA, but did not make a decision. Another meeting is on for next month at EU headquarters in Brussels.

” If they don’t decide on it, then we can conclude it is a fait accompli,” said Ian McDonald, chief executive officer of the Sugar Association of the Caribbean.

The 75,000 tonnes is worth about 48 million dollars to the industry. The ministers said the current SPS arrangement is scheduled to end on Jun. 30 and they plan to negotiate a six-year renewal with the EU.

“It is very important to us that it is rolled over for another six years. We are going to make representation on this, “said McDonald.

Meanwhile, the ministers say they will also make known their unhappiness with the way in which the EBA was brought into existence. They said that in a key clause in the aid and trade accord between the EU and the ACP called the Cotonou Agreement, sugar was one of the commodities deemed important to the economies of some 20 ACP states.

Therefore, a clause was built into the agreement signed last year in the capital of the West African nation of Benin, for mutual consultation before any major decision was taken to change the face of the sugar protocol.

ACP states say that while they cannot in principle object to LDCs getting privileged access to the EU market they do not agree that that should come at their expense.

Forster says that current trends indicate that demand for cane sugar is increasing in Europe and so officials could easily have left things intact rather than cut the amount ACP states can export.