Brussels, 16/01/2001 (Agence Europe) - A little more than three months have gone by since the presentation of the "Everything But Arms" initiative and the European Commission is preparing to review its copy. It is expected to finely tune and perhaps disclose, on Wednesday, its new plan for access to Union markets for all products originating in the world's poorest countries. The "fine-tuning" operated at the end of last year covers the elements that were the most severely shaken within the bodies responsible for preparing the ministerial discussion that the Council planned to initiate from Monday 22 January. According to convergent sources close to this dossier, a transition mechanism, prolonged and supported, is now envisaged for sugar, rice and bananas - three highly sensitive products which, according to an impact study carried out by the services under Franz Fischler, could suffer from complete liberalisation.
During his first speech of the year, in Oxford, Commissioner Pascal Lamy, the instigator of this initiative which has already found several allies in the world (New Zealand and Chile), had urged the Fifteen to undertake "this special action in favour of the least developed countries, the world's 48 poorest countries". The Commission made this proposal, he had explained, as "for too long we have talked in positive terms about the need to give them market access, whilst often failing to deliver that in areas where they actually can export". "There remains of course the little matter of getting the proposal approved (in Council), and this has proved difficult in relation to one or two sensitive products such as sugar and rice", he noted without for that giving way: "We are determined to move forward, and the Commission is therefore in the process of reviewing the project in view of reaching agreement early in the new year".
The Council had planned to open the ministerial debate "possibly" on Monday, that is if the Commission finally forwards the new plan of opening the market, the presentation of which it has already postponed on two or three occasions. Uncertainty remains given the reservations that some claim certain members of the College have, well-informed sources stress. The same sources stipulated that the changes made to the Commission assessment aim, essentially to: i) extend the transition periods - initially provided for three years; - until the complete opening of the Community rice, sugar and banana market to the least advanced countries (LACs), possibly to around 2006, that is to say after adoption of the decisions on sectoral reforms; ii) a quota system for determined quantities on the basis of recent traditional references, by choosing the best annual performance of the country concerned increased by 15% a year until the end of the transition. These changes would reassure those of the Fifteen that are hesitating and give the LACs to time to make adjustments to take the best possible advantage of access free of duty and quotas of which they would benefit in the long-term.
The internal discussion has stuck, and whence the difficulties, at the level of the development cooperation and trade bodies (113 Committee) who are preparing the ministerial debates. It has been practically suspended since December, while waiting for a review taking account of repeated fears, session by session, by national delegates, essentially those of the Mediterranean countries, as well as Germany and Austria regarding rice, sugar and bananas.
Commissioner Fischler, responsible for Agriculture, personally rang the alarm bells by publishing, at the end of the year, an internal study betting on the disruptive impact for some European markets with, in the front line, the three sensitive products cited. In the case of sugar, his services assessed the cost of the initiative at a little more than EUR 1 billion, on the basis of an import hypothesis of 2.7 million of sugar from LDC in a totally open European market, without taking into account an addition of compensations that could be required compared to what the Commission foresaw. These countries, whose productions is presently of around 2.1 million tonnes of sugar for a consumption of around 3 million, would no doubt be incited to export their sugar towards the EU whose markets is made "extremely attractive" by the well above world market prices (650 against 250 to 300 Euro/tonne), or even to increase their production and their refining activities, note the experts. The same applies to rice, for which they will no doubt be inclined to send to the EU processed, seen the level of European prices. The quantities they have for this are "enormous", both for rice produced there as for rice from other regions, benefiting from the LDC origin after processing. Consequence? The European sentiment should be moved towards intervention, with the annual cost of around EUR 340 million, its loss of competitiveness against the joint competition of the LDC and Asia and the need to review the proposal to reform the sector, say the experts. In the case of the banana, the prospects are also worrying, with the risk of "depriving the ACP and other developing countries from access to the market and commercial profitability" if access, free of duties, was offered to LDCs. Some other products are covered by this study, except certain smaller, but highly sensitive products (garlic and berry). The study is accessible on the Web site of the agriculture services of the European Commission.