The future of sugar in the African Caribbean and Pacific (ACP) countries was the main talking point when discussions opened here yesterday, aimed at ensuring that strategies adopted will address the various challenges in the industry, against the backdrop of a global recession.
The European Union (EU) will end its price support for sugar in the ACP in September, eroding preferences previously supported in the protocol and creating new regulations for trade in the Economic Partnership Agreements (EPAs). Imple-mentation issues in the EPA sugar arrangements and the EU Action Plan on Accom-panying Measures are high on the agenda of 11th Special ACP Ministerial Conference on sugar that opened at the International Convention Centre yesterday. There is also likely to be a way forward on the EU sugar regime, post-Sugar Protocol, as well as the position of the ACP group on the World Trade Organisation (WTO) negotiations on sugar by the time the conference wraps on Thursday. .
Prime Minister Samuel Hinds said the provisions will be cross-cutting in the EPAs and opined that while access at the current level of supply has been achieved along with opportunities for expansion, it may become contentious in the coming years. He said too that the spectre of oversupply and resultant cutbacks to the non-Least Developed Countries and ACP suppliers to threshold limits cannot be ignored.
He referred to the new EPA arrangement as “uncertain and unfolding,” saying that the government remains unhappy with the provisions in the Cariforum EPA on trade in sugar containing products, declaring that the administration here will have to insist on the removal of the cumulation stipulation that “prevents one regional supplier from engaging in value addition in a sister state for the purpose of exporting the product into the EU duty free,” when a review of the EPA agreement is undertaken in another three years. “We have had to conduct due diligence in determining how the European sugar market will unfold, who would be the winners and who could be losers,” Hinds said, while stressing that in the current global economic downturn no buyer, however well-established, can be regarded as completely well secured as opposed to a government-backed guarantee.
He likened the new trading climate as “being tantamount to worsening terms of trade,” saying that it proposes a situation where countries are worse off now than before the EPA. Hinds also mentioned the accompanying EU measures of support saying that the slow pace of delivery of these measures with strict conditionalities restricts the disbursement of timely support to countries whose economies are hurting from the 36% cut in sugar prices.
Hinds called for ACP countries to press Europe to simplify its approaches to the delivery of support to sugar protocol countries affected by the reform of the EU sugar regime.
Further, he lamented the emergence of protectionist measures noting that these can only hurt developing countries.
Sugarcane is
sustained growth
ACP Ministerial Spokesman on Sugar and Chairman of the Conference Satya Veyash Faugoo, referred to sugarcane as the most-suitable agricultural crop that can provide the basis for sustained growth in the real economy in ACP countries, but pointed to the need for diversification in the industry. He spoke of the need to improve productivity and competitiveness of the industries and transform them from mainly raw sugar production to a cane cluster that will co-generate environment-friendly energy, produce ethanol and high-value sugar containing products. It is time for “bold measures,” according to him.
Faugoo, who is also Minister of Agro-Industry, Food Production and Security of Mauritius, said the sugar trade is at an important crossroad, but he declared that now is the time for countries to kick start economies, fight protectionism and create new opportunities for trade and investment.
As countries adjust and adapt to situation of new trade arrangements, Faugoo questioned the adequacy of the accompanying measures by the EU to finance strategies in the ACP region as economies modernise and sugar industries are restructured.
He pointed to his own country Mauritius, explaining that like other ACP countries, it is now encountering difficulties in securing the much-needed additional investment due to the financial crisis, adding that there is a risk all the preference indicators could not be met in an effective and timely manner.
Faugoo mentioned also the global crisis. “We must request the EU commission to show greater flexibility and plead with European parliament to provide additional resources beyond the current financial framework because the impact of the crisis was not factored in…”
He urged extreme vigilance as the EU commission finalises the rules and regulations of the EPA trading agreement, saying that ACP countries have to make sure that there is no discrimination and that the EU fully complies with commitments made in the EPAs.
Open to free trade
Minister of Foreign Affairs Carolyn Rodrigues-Birkett said Guyana is not opposed to free trade, but is mindful of its vulnerabilities and, “we must not be ashamed to speak of these.” She underscored the importance of the sugar industry to the local economy while noting that increased sugar yield and diversification are required for the industry and others in the ACP region to survive.
Rodrigues-Birkett said that sugar is not just another product here but a way of life, adding that preferential trade and support for economies are major concerns as the EPAs come into being. She said vulnerable economies need sufficient opportunity and development space to adjust to a changing liberalised environment.
Further, she said Guyana supports an early and successful conclusion of WTO Doha Development Round, provided there is a balanced, development outcome, noting that Caricom’s position in the Doha round is closely aligned to those of smaller countries. Additionally, the minister said the implementation of the accompanying measures EU support programme needs to be expedited with great sensitivity and timeliness.