Tuesday, February 12, 2008

South Centre in Media: EU Sugar Reform a Bitter Pill for Poorer Producers

This piece written by David Kleimann while working at the South Centre appears in the IPS Columnist Service.

(IPS/South Centre) - For more than three decades, the European Union has maintained an extremely costly supply management scheme for its domestic sugar market which insulates domestic producers from international market forces with price supports and tariffs and has resulted in domestic prices triple world market prices and a major production surplus. At the same time, the EU has granted duty free market access for guaranteed quantities to some of its former colonies at guaranteed prices, writes David Kleimann, a German expert on international law and international relations.

In February 2006, the EU adopted a radical reform programme of its sugar regime which is having severe effects. Some ACP high-cost producers are very likely to cease production because of the price reductions, while others will face a sharp reduction in their export earnings, and only a small group of competitive LDCSs will be able to comfortably continue to supply the EU market after the price reductions have been implemented and the preferences terminated. The EU has the moral and legal obligation to provide the small and vulnerable ACP economies with market access for sugar that is worth no less than the previous trade arrangement and that continues to contribute to the realisation of their economic development and poverty reduction.