Guyana sugar, rum must be more competitive - business exec
GEORGETOWN, Guyana, CANA: Leading Guyanese business executive Yesu Persaud on Wednesday said that Guyana's rum and sugar industries must become more competitive if they are to survive in a new post-Lome trading arrangement. Persaud, a former Chairman of the Private Sector Commis-sion, was part of the Guyana delegation headed by Foreign Affairs Minister Clement Rohee at the recent second Ministerial Conference of the African, Caribbean and Pacific (ACP) and the European Union (EU) in Brussels. Speaking at a news conference hosted by the foreign minister, Mr. Persaud said the proposed idea of Regional Economic Part-nership Agreements (REPAs) could have far reaching consequences for Guyana's sugar and rum industries. As an alternative to the establishment of REPAs, the EU has proposed that ACP countries move to an enhanced General-ised System of Preferences (GSP). This would place Guyana and the other ACP countries within the same trading status of non-ACP countries which would mean eventually no preferences. "We're not ready for REPAs because what it means is that we will have to open up our markets after this period of transition/negotiations which finishes in 2005. Most ACP countries will become marginalised because they have very few products other than commodities to export," Mr. Persaud said. Sugar is considered the mainstay of the Guyana economy and in 1998 contributed some 15 per cent to the gross domestic product (GDP) and 51 per cent to the agricultural GDP. Guyana is also the second largest supplier of sugar to the EU market under the Sugar Protocol and Special Prefer-ences trading arrangements for the 1998/1999 quota year. "There is some talk that the Sugar Protocol is not written in stone. It is an agreement that is open-ended but what is likely to happen after this transitional period or even before, the EU would be forced to not open up its market but to reduce the subsidies to all beet farmers in general and this could reduce the price of sugar in time or over a period of time," Mr. Persaud said. "Our industry in Guyana has to be prepared to be competitive to bring down its cost so as to be competitive with all takers in the future," he added. The executive who also heads the Demerara Distillers Limited Group of Company said rum was a "contentious issue" at the conference. In 1996 the quota on rum was removed after 20 years and the commodity has no preferential price advantage. "We have to compete with the French rums and they are subsidised - we in the Caribbean are not subsidised. At a WTO meeting in Singapore the EU and the US had a side agreement where all white spirits including rum was to become duty-free in 2003 and the duties were to be reduced proportionately over that period starting in June 97," Mr. Persaud said. This makes it imperative for the rum industry to begin competing from the year 2000, he added. "What we pointed out was the absolute need for transitional period and an indexation of the duty. The way that it is being levied and the prices that are obtainable otherwise the industry will suffer," he continued. According to the executive, the ACP's position is that such an idea at this time is not workable since it will mean the opening up of markets after 2005. It is felt that most countries can become marginalised by having to compete with more developed countries. Mr. Persaud looked at the possible implications for Guyana's rum and sugar industries. Since the first Lome agreement in 1975, ACP member countries have benefited from preferential trade terms with Europe allowing them to freely export most of their manufactured goods and agricultural produce to EU countries.
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