ACP Presents Its Own Sugar Proposal To The EU

by Amanda Banks, Tax-News.com, London

16 November 2005

The African, Caribbean and Pacific Group of States (ACP) on Monday circulated details of a proposed new EU sugar regime, complaining that the EU's own recent proposals are far too harsh, and that it continues to subsidize its own refiners.

The ACP states have agreed a common position, which has been distributed to EU member State delegations, Commissioner Fischer Boel and Members of the European Parliament, and comprises a net price cut of 19% spread over 8 years starting in 2008 with the retention of refining aid of 5.1%. This compares with a dramatic 39% cut over four years as proposed by the European Commission, after the WTO had thrown out a previous set of proposals.

“We have not plucked this figure out of thin air. A net reduction of 19% over 8 years with the retention of refining aid would be fully in line with the EU’s WTO commitments, despite what the Commission may claim to the contrary. From our perspective, while far from ideal, it would allow more ACP producers to remain competitive and offset the economic and human suffering that will inevitably be caused by the drastic reform,” said H.E. George Bullen, Chairman of the ACP Consultative Group on Sugar.

“We are aware of the pressures for some degree of price cut. However, we cannot accept a reduction that is unjustifiably excessive and hits the most vulnerable stakeholders the hardest.” he added.

Says the ACP: 'The removal of refining aid is of critical importance and significantly discriminatory vis-à-vis the ACP, and is one of the aspects of the European Commission’s proposals that has been largely ignored. The shift in burden of refining costs from the EU to the ACP, which the ACP have vehemently decried and consider as unjust, would cost the ACP €35 million per year. Total losses in export earnings from a 39% price cut would be up to €300 million a year. Such a drop in earnings will devastate ACP sugar industries with disastrous socio-economic consequences in these countries.

'ACP sugar supplying states strongly appeal to Member States to take their concerns into account in the crucial meeting of EU Agriculture Ministers on 22-24 November. The ACP are determined to push for more adequate financial assistance to help cushion the impact of reform than the paltry €40 million thus far proposed by the Commission. Like the EU beet growers and beet sugar producers, for whom €5.7 billion has already been earmarked in 2006, the ACP have legitimate expectations to be provided with adequate and clearly specified amounts of financial resources on an annual and predictable basis. In the coming weeks the ACP sugar group will be presenting a consolidated proposal on the overall figure needed for 2006 and thereafter along with individual country action plans.'

“The stakes are high.” according to Ambassador Bullen. “The next few weeks offer the EU the opportunity to show that it is genuine in its stated commitment to the developing world. If we continue to feel that our concerns are being ignored, we can anticipate strong repercussions for the Hong Kong WTO Ministerial Conference and beyond. The EU cannot expect to progress at Hong Kong at the expense of the ACP.”

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