Sugar reforms prove bittersweet for ACP

EU agriculture ministers last week adopted a number of changes to the sugar reform introduced in 2006. The aim of the legislation was to improve competitiveness and market-orientation of the EU sugar sector and guarantee its long-term future. But the reform also includes terminating the 30-year-old Sugar Protocol, which provides preferential access to the EU market for ACP sugar, and could cost each of the ACP countries €250m per year. The protocol offered price and volume guarantees. The sugar reform has caused much concern across the industry. Key sugar companies, including Tate & Lyle and Danisco, were thought to be the most hit by EU changes, which are centred on removing quota from the market. Last week however, Danisco said the amended reform showed "positive elements" and now offers financial rewards for shedding quota. For ACP members, the reform not only comes as a financial blow, but could also affect trust between the ACP countries and Europe over future agreements. ACP had previously though the protocol would be secured, and in 2005 the group said they were assured by Commissioner Peter Mandelson the arrangement would be safeguarded. ACP said the protocol has played a crucial role in the small vulnerable economies of the ACP sugar producing countries, which rely on sugar, and supplies up to a fifth of their GDP. The EU's decision comes at a time when ACP are still reeling under the shock of a 36 per cent cut in sugar prices under the 2005 reform of the EU sugar regime and when negotiations on new Economic Partnership Agreements (EPA) between the EU and ACP countries have yet been completed, ACP said. Patrick Gomes, Ambassador of Guyana to EU and chairman of the ACP Consultative Group on Sugar said: "This is a potentially devastating double blow to our economies. The EU is reneging on its previous commitments to the ACP countries with a pre-emptive strike at a time when we are still negotiating the EPAs in good faith. ​ ​"Unless the guarantees of the Sugar Protocol are transposed into the new agreements it will leave us significantly worse off than we are already. This would be a complete contradiction of the stated goals of the EPAs."​ ​"Denouncing the Sugar Protocol is a political decision on the part of the EU which sends an extremely worrying message in the overall context of the EPA negotiations,"​ he added. However, a commission spokesperson said the protocol was a consequence of the EC market access offer to ACP countries in the Economic Partnership Agreements presented in April. He said the "EC market access offer foresees to phase in duty and quota free access for sugar. This is a very generous offer bearing real opportunities for ACP sugar exporters. By contrast, the current Sugar Protocol is based on quotas, and concerns only a limited number of countries." ​