22 December 2000

Sugar market reprieve?

By Philip Clarke

BRUSSELS plans to open up the EU sugar market to the worlds least developed countries are expected to be watered down, if not abandoned altogether.

Known as the "everything but arms" initiative, the commission has sought to eliminate all trade barriers to the worlds 48 least developed countries for a wide range of products, including sugar.

But it has attracted widespread criticism from the UK, French and German industries, who say it will devastate their markets.

British Sugar estimates it will lead to an extra 2m tonnes of sugar coming in at prices way below internal values. This could climb to 5m tonnes, or 40% of EU production, as these countries expand their production.

Certain African, Caribbean and Pacific (ACP) countries, which already have preferential access to the EU, also oppose the proposal.

The EUCommission was due to re-examine it at a meeting yesterday (Thursday). But that was called off for a third time as the two principle players – farm commissioner Franz Fischler and trade commissioner Pascal Lamy – are still wide apart on the issue.

Brussels insiders suggest there are three options on the table:

&#8226 To extend the period for cutting import tariffs and quotas to five years and introduce safeguards, such as a ceiling on each least developed countrys exports.

&#8226 Exclude sugar from the proposal for now, and then introduce a system of special quotas for the non-ACP countries.

&#8226 Exclude sugar permanently.

These three options have been costed, but a definitive impact assessment of the plan is not yet ready. Discussions will resume in the New Year.

Meanwhile, farm ministers meeting in Brussels this week failed to reach agreement on reforming the existing sugar support regime.

While the commission has been looking for some minor amendments for the next two years, followed by much more radical reform in 2003, most member states want a five-year rollover of the current regime. Only the UK, Sweden, Denmark and the Netherlands called for swifter, deeper change at this weeks council.

Final decisions cannot be adopted until the European parliament has given its opinion, expected in February, though farm council president, Jean Glavany, said there was a clear majority in favour of extending the regime for another five campaigns.

Mr Fischler said that was not a satisfactory answer. "We cannot ignore that sugar has gone unreformed and, therefore, has departed further from other arable crops." &#42