EU's 'everything but arms' plan can relegate Guyana to poorest of poor - Rohee tells St Kitts-Nevis meeting Stabroek News October 23, 2000 The European Union's "Everything But Arms (EBA)" proposal could put Guyana back into the category of the poorest of the least developed, according to Foreign Minister, Clement Rohee. The EBA proposal, announced on September 20, would provide the 48 poorest countries of the world duty-free access and quota-free access into Europe for all their products except arms. He told a Joint CARIFORUM/European Commission meeting in St Kitts/Nevis on Friday that the initiative as it is strikes "at the roots of three pillars" of Guyana's well-known weak economy. He said that "the combined impact on sugar, rice and rum all at the same time, in a market as important to us as the European Union's, is a virtual knock-out blow. Guyana cannot sustain this." Sugar and rice account for 23 per cent of Guyana's Gross Domestic Product (GDP) and 70 per cent of agricultural GDP (57 per cent for sugar and 13 per cent for rice). Together Rohee said "they contribute 41 per cent of total export earnings and support 30 per cent of the population." Rohee in his address argued that "in signing the Cotonou Partnership Agreement, (Guyana) thought it had safeguarded itself against such shocks" but that "it now appears from this latest Commission action, which is certainly in breach of the procedures solemnly agreed to in that Agreement... that we were wrong." The Cotonou Partnership Agreement comes up for ratification here today when the National Assembly meets. Detailing the impact on sugar, Rohee explained that arrangements secured under the Sugar Protocol have provided stable and long term support, which underpin the sustainability of Guyana's most important industry. Any disruption of the current Sugar Protocol regime "would undermine our economic performance and our structural adjustment plans for the economy as a whole and for the sugar industry in particular." "Any additional access for LDCs (Least Developed Countries) should not be such as to discriminate against the non-LDC signatories of the Protocol who have traditionally supplied sugar to the EU (European Union). He pointed out that it accounts for over 26 per cent of Guyana's export earnings, and employs directly 25,000 persons including women and small farmers. It also provides indirect employment, he said, for a further 10,000 and contributes to improving agricultural and industrial skills through training programmes the industry offers its workers and the nation as a whole. Rohee pointed out that "in the light of the importance of sugar, Guyana has embarked on a modernisation and rationalised programme, with a view towards achieving international competitiveness in the future." Ownership of the rum industry, which is one of the industries, which underpins the economies in the Caribbean countries in the African, Caribbean and Pacific group of countries, is mainly in the hands of Caribbean nationals and employs over 10,000 people. It is not subsidised, according to Rohee, and is in stark contrast to the fact that "as much as 87 per cent of global production of alcohol is subsidised." "ACP countries, for the most part, are under great pressure to progressively liberalise their economies, and therefore, have no capacity to fund support programmes for domestic industries." He explained that most ACP rum distillers are only viable because the volume distilled for export enables their plants to operate efficiently. "Thus the export market is a critical component in the survival of the industry." The EBA proposal, Rohee said, would have an adverse impact on rice exports from Guyana and Suriname. They export 70 per cent and 60 per cent respectively of the rice they produce and most of their exports go to the EU (European Union) and CARICOM where they enjoy preferential access. He said that both countries are anxious to use the "preparatory period" (the life of the Cotonou Agreement) to increase the productivity and competitiveness of the industry. However, he pointed out that the implication of the Commission's EBA initiative "is that 2004 - halfway through the preparatory period - ACP rice exporters may have to compete on a significantly less favourable basis in the EU market, with the vastly larger non-ACP LDC producers such as Bangladesh, Cambodia, Laos, Myanmar and Nepal". He said that at a meeting in Trinidad in May and in meetings since then, the CARIFORUM ministers decided to seek support for the rice industry similar to that being considered for rum. The measures to be sought are short-term institutional help for the Caribbean Rice Association; the preparation of a financing proposal by a consultancy mission to Guyana and Suriname; and information related to the Joint Working Party (JWP) provided for under the Joint Declaration on Rice. Follow the goings-on in Guyana in Guyana Today