Select Committee on European Scrutiny Appendices to the Minutes of Evidence



APPENDIX 2

Memorandum submitted by ACP London Sugar Group

  We ask that our following concerns are taken into account by the joint meeting of the European Scrutiny Committee and the Agriculture Committee of the House of Commons to assess the EU Everything But Arms proposal for LDC's (EC 12335/00) and the new EU Sugar Regime proposals (EC 12087/00).

    —  In Cotonou in June 2000 the EU and ACP signed a post Lome IV new partnership agreement. It sets out in detail a lengthy timetable in which trade barriers would be progressively removed for the ACP and the new arrangements would become WTO compatible. A "preparatory" period of eight years, 2000 to 2007, was agreed followed by a "transition" period of a minimum 10 years to be negotiated for the economic partnership agreement. The special legal status of the Sugar Protocol was endorsed. Evolving duty free access from LDC's was provided for, with the phrase "essentially all the products" (Article 37[9]) clearly understood to mean the exclusion of "sensitive" products covered by Commodity Protocols and the CAP, such as sugar, rice and bananas.

    —  The current regime expires in June 2001 and DG Agriculture has proposed a new two year Sugar Regime, whereas the majority of Member States, and the ACP sugar suppliers, are seeking a five to six year period. This proposal is following the normal committee procedures, scrutiny by the European Parliament and two impact studies have been commissioned and will be completed within two years.

    —  DG Trade has proposed, commencing 1st January 2001 to eliminate duty and tariffs for "Everything But Arms" from the LDC's. This proposal is being fast tracked and structured so that it does not have to be referred to the European Parliament. It dramatically contradicts the terms of the Cotonou Agreement by including the sensitive products, such as sugar, rice and bananas by the replacement of "essentially all" by "Everything But Arms" and by sharply advancing the Cotonou timescale.

    —  If the EBA proposal is not amended Commission sources estimate some 2 million tonnes of LDC sugar would enter the EU within three years. This enormous increase in imports will quickly destabilise the EU sugar market and undermine the Sugar Regime, firstly by eliminating the Special Preferential Sugar Agreement (250/300,000 tonnes ACP sugar) and secondly by putting severe pressure on the Sugar Protocol (1.3 million tonnes ACP sugar).

    —  It would be devastating for ACP sugar suppliers and their fragile developing country economies, particularly for the Caribbean producers who supply sugar, rice and bananas. These producers are ploughing back their EU sugar income to modernise and reduce costs in their sugar industries, and their ability to achieve their strategic objectives depends upon finance made available against guaranteed long term sugar income from their exports to the EU.

    —  The ACP sugar industries understand the global WTO pressures for liberalisation but to survive require change to be gradual and progressive and to be managed over a lengthy timeframe, as is envisaged under the Cotonou Agreement. Clearly they are fully sympathetic with the EU's wish to further assist the world's 48 poorest countries, 39 of which are signatories to the Cotonou Agreement, but believe this can be achieved by adopting coherent and not contradictory EU initiatives which, in addition, would not be detrimental to their interest.

    —  We consider that the UK Government, the other EU Member States and the Commission must be pressed to achieve coherence between DG Agriculture in respect of their Sugar Regime proposals and DG Trade in respect of their LDC proposals, that the European Parliament must be consulted on both interrelated issues, that an overall integrated impact study must be carried out covering both issues, which is independent and published, and that the EBA proposal is amended so that it at least excludes the sensitive products of sugar, rice and bananas until the overall impact exercise is completed. It is crucial for the ACP that the "essentially all" criteria and timeframe of the Cotonou Agreement are reinstated to ensure managed change and the avoidance of devastating circumstances for ACP sugar suppliers to the EU.

    —  With some of my colleagues I would be happy to follow up this note by attending the meeting on 20 December 2000.

13 December 2000


 
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