New trade accord may thwart ACP agreement

Date: 01/03/01

By Peter Chapman

SUGAR producers in Africa, the Caribbean and the Pacific claim an EU deal to free up trade with the world's 48 least developed countries is "robbing the poor to pay the poor" and could breach an accord they signed with the Union last year.

The warning from the EU's traditional trading partners follows this week's agreement among member states to gradually eliminate duties for sugar, rice and bananas over the next decade as part of a general deal to open markets for the poorest countries in 'everything but arms'.

Matai Toga, Fiji's ambassador to the Union, said a key part of the agreement could mean the EU reneges on a deal struck with ACP countries in Cotonou, Benin, last June. Sugar producers from the poorest nations would be granted an immediate duty-free quota for exports to the Union, rising by 15% a year, with tariffs phased out between July 2006 and July 2009.

Toga said he feared the initial quotas would be matched by a pro-rata reduction in market access for ACP countries.

"The EU signed an agreement saying that current market access of commodity producers would either be maintained or improved but not reduced," said Toga, who is chairman of the group representing the 17 ACP members that export sugar to the Union. "If when it is implemented that is going to be the primary source, then there is a breach of the Cotonou agreement. This would be robbing the poor to pay the poor."

A trade expert for UK sugar refiner Tate & Lyle said the deal would have a "neutral effect" on EU sugar companies, although she said dealing with imports from more countries would add to paperwork facing firms.

Monday's 'everything but arms' deal was a hard-fought compromise between liberal member states and a group of countries led by France, Spain, Italy and Greece, who were anxious to avoid damage to their domestic agricultural markets - although France opposed the resulting accord.

A blocking minority of member states had earlier threatened to veto the proposals, unveiled last year by Trade Commissioner Pascal Lamy, unless there were delays in market-opening for trade in sugar, bananas and rice.

Ministers agreed to cut duties on poor countries' banana exports by 20% a year from 2002, and eliminate them by January 2006. Rice duties will be gradually reduced to zero between by September 2009.

Sugar producers in Africa, the Caribbean and the Pacific claim an EU deal to free up trade with the world's 48 least developed countries is 'robbing the poor to pay the poor' and could breach an accord they signed with the Union in 2000.