The perception seems to be that sugar is dead in most Caricom countries and dying in the rest. As a result public concern is muted or non-existent when the European Union, as it has been accustomed to do in recent years, gets set to inflict further damage on this industry.
Sadly, it is probably half-forgotten how brutally the EU behaved in bringing the Sugar Protocol to a premature end with consequential colossal loss of revenue for Caricom sugar industries. This unilateral ending of a well-tried, mutually beneficial, development-trade treaty finally killed off the sugar industries of St Kitts Nevis and Trinidad and Tobago and struck devastating blows to the sugar industries of Jamaica, Belize and Guyana.
Never let it be forgotten that the 36% price reduction in our sugar price not only delivered heavy damage to our sugar industries but seriously affected the terms of trade and balance of payments of what are basically poor and vulnerable countries. In total the African, Caribbean and Pacific (ACP) traditional suppliers of sugar to Europe lost £300 million annually, repeat annually. This was far, far more than the “accompanying measures” compensation sop offered by the EU to the ACP countries concerned.
A fair whack of this loss was inflicted on Guyana. The 36% cut meant that Guyana’s sugar revenue was reduced by $8 billion annually.
Do the calculation yourself – $8 billion lost year after year with our foreign exchange earnings reduced accordingly. I have been accused in the past of being over-critical of the EU but in this regard I think such a cut deserves to be called brutal.
And something else to notice is that this reduction in price which EU negotiations at the time claimed was absolutely necessary in order to benefit ordinary European consumers of sugar led to no consumer price reduction at all – the only beneficiaries being big corporate users of sugar who got the reduced price, kept on charging the same price for their products and reaped the bigger profits thus handed to them on a plate!
So it was a case of more money for big European companies, less money for poor developing countries.
Now, even before the measures taken to survive the imposed end of the Sugar Protocol have had time to mature, the EU is preparing further changes in how sugar is marketed in Europe which will visit more woe on ACP, including Caricom, sugar industries.
The European Commission has announced, naturally without consultation, that it intends to abolish all quotas for the domestic European production of sugar as of September, 2015. This will radically alter the European sugar market for ACP countries and also Least Developed Countries (LDCs). It will lead to free-for-all trading in sugar which is just what the ACP and LDC countries were, hand-on-heart, promised by the EU would not happen in the foreseeable future. ACP and LDC sugar industries were to be given time to adjust to a market which was lower-priced but would remain managed and predictable.
This unexpectedly rapid transition – just over three years – to a free-for-all sugar market in the EU, (a) would fly in the face of assurances given to the ACP and LDC that there would be time to adjust to the crippling loss of revenue resulting from abolishing the Sugar Protocol; (b) would ignore a recent resolution of the European Parliament; (c) would be a severe deterrent to ACP and LDC countries investing in their sugar industries; and (d) in the case of Caricom, which has an Economic Partnership with the EU, would be a unilateral modification of the EPA.
ACP and LDC sugar suppliers have expressed their “profound concern and dismay” at the European Commission’s proposals.
Anyone who has worked in the sugar industry in the last ten years or so will recognize those sentiments and that phraseology – “profound concern and dismay.” It has become the normal ACP reaction to European sugar policies which have ridden roughshod over previous commitments. On this latest occasion Guyana’s ambassador in Brussels has been particularly forceful in condemning the Commission’s announcement.
As someone who is retired and is now no more than an interested and alarmed observer, let me describe the inevitable sequence of events which will now follow. We will be assured that “no final decision has yet been made,” that “studies will be undertaken to assess the impact of the proposals” and that, of course, the Commission “has the best interests of the ACP at heart.” There will be long drawn-out discussions and countless meetings and feverish appeals and urgent diplomatic interventions, perhaps even at the highest level.
And… we will get absolutely nowhere. The Commission proposals will be implemented with, if we are lending, a delay in implementation of a year or two to show how generous the European Union is or to placate their own beet sugar producers who do not themselves like the proposals. But have no doubt, it will happen – unless, of course, the appalling European debt and currency mess leads to the disintegration of the whole grand edifice of the Union itself. Still, that is unlikely.
So let our Caricom sugar industries prepare for the next lash. It is coming.
