Brussels, 20/09/2005 (Agence Europe) - The 18 ACP countries associated with the European Union by the sugar protocol and 10 of the least-developed countries (LDC) called for a smooth-running reform of the Community sugar regime, at their informal meeting with the agriculture ministers of the Member States of the EU in Brussels on 19 September. They spoke out against the legislative proposals, which they feel will have too dramatic an impact on their economies, presented last June by the European Commission.
The ACP States and the LDCs share the same concerns of preserving preferential access to the European market for their sugar producers. Their specific demands are not exactly the same. The ACP countries are calling for a price reduction which is far less than that proposed (39% over two years as of 2006), more staggered over time and not starting until after the Doha Agenda negotiations at the WTO are over (end 2006). Furthermore, they feel that the aid proposed by the EU for restructuring this sector is derisory. According to the ACP countries, the reform as proposed would lead to the loss of half of the export revenue of their sugar producers in 2009, or financial damage of over 300 million EUR a year, not counting the economic, social and environmental impact. According to the LDCs, the Commission exaggerated the effects of the "Everything But Arms" initiative they benefit from (access to the Community market without customs duties). They say that they are prepared to limit their exports to the EU, as long as the price reduction for European sugar is between 15 and 20% (and thus with a preferential price).
At the press conference which followed the meeting, Mariann Fischer Boel, the European Commissioner for Agriculture, welcomed the fact that the ACPs and LDCs had recognised that the reform is inevitable, "even though we have not yet been able to reach agreement on the pace and scope" of the measures to be taken. She warned that "the longer we wait, the tougher the reform will be". The Commissioner defended the reduction of 39% as proposed, responding to the countries calling for a price reduction of between 15 and 20% by stating that this kind of level would not make it possible to "ensure the much-needed restructuring of the sector, whilst imports will increase dramatically, which would cause our market to crumble away". She pointed out that with a reduction of 39%, prices on the European market would remain twice as high as the prices on the world market.
Ms Fischer Boel said that between January (date of the previous meeting, EUROPE 8874) and today, the EU had taken account of two requests on the part of the ACP and LDC states: -during the first year, the price reduction will be 20% for the European producers, that would be far less for the third countries ("which would allow them more time to adapt"; -on the proposal which has adopted on 22 June, the Commission has changed its stance by promoting an identical price reduction for raw sugar and refined sugar (in its communication of July 2004, it referred to levels of -39% for refined sugar and -42% for raw sugar). On the LDCs, Ms Fischer Boel said that "we have absolutely no intention of backtracking on the Everything But Arms initiative".
Louis Michel, the Commissioner for Development, spoke of the "highly flexible" action plan envisaged by the Commissioner to help the countries of the sugar protocol to adapt to the Community reform of the sugar sector. "I feel that this reform is an opportunity for these countries to develop towards more sustainable economies, which are more diversified and less vulnerable to political change", said Mr Michel, adding that "realistic adjustment plans (drawn up by each of the ACP countries) would have our unstinting support". In this context, he pointed out "how important it is now to move forward with strategic plans, which will allow me to have a clear idea of the sums necessary for the Commission to pledge in order to support these adjustment measures". He said that the proposed budget of 40 million EUR for 2006 is a "start-up budget". This support programme will cover eight years and will have "considerably greater" financial resources, the Commissioner promised, before pointing out that the various development aid instruments "available to us" will also help to respond to the needs defined by these structural adjustment plans.
The spokesperson for the ACP countries, Arvin Boolell, who is the Minister for the agro-food and fisheries industries of Mauritius, highlighted the need to "honour the rights and commitments linking the EU to the ACPs under the sugar protocol. We are not unreceptive to change. However, we do not want a reform which is too in-depth, or too brutal, because this could have a negative impact on small, vulnerable economies which have no other outlets", he said, adding: "our markets are far from lucrative". Answering questions from the press about the requirements formulated by the ACP countries, Mr Boolell said that "all roads lead to Geneva (where the WTO negotiations are being played out). Sugar must feature on the list of sensitive products (for reductions in customs duty), and the safeguard clause must be included in the WTO provisions". Mr Boolell went on to say that "we are not against the reform, we just want it to be fair". Addressing the spokesperson of the ACPs, Ms Fischer Boel stressed that the action plan would help "your sugar industry to be more competitive on the world market, even though you will enjoy lower prices on the European market". She stated that sugar would remain a lucrative activity for the ACP State producers.
The president of the LDCs, Ahmed Hussein Ahmed of Sudan, said: "we have enjoyed access to the European market under the Everything but Arms initiative, a development instrument which has been very useful to our economies and which aims to promote exports from the LDCs to the EU". He stressed that this programme had gone down very well with the LDCs and investors, but criticised the Commission's proposed sugar reform. He feels that a reduction of 39% of sugar prices "would have the consequence of dealing a serious blow to our competitiveness margins". Mr Ahmed acknowledged that the LDCs would not be affected as seriously as the ACP States, whilst noting that their economies would not be able to "take full advantage of this export potential, which may be seriously affected by this brutal reduction in prices". He called, therefore, on the Commission to review its position: "there are WTO commitments to be respected, we have called for the effects of the reform on the major Millennium objective (reduction of poverty) to be taken into account". "Trade in agricultural products should be considered as a development instrument", concluded Mr M. Ahmed.