World Trade Organisation, Geneva, November 21-22 2002

I wish to begin by expressing my unequivocal support for the statement just made by the distinguished Minister from Mauritius.

September 27, 2002, in two distinct yet clearly contrasting ways was of great significance. It was the occasion when, a long with my colleagues from Africa, the Caribbean and the Pacific, we commenced negotiations with the European Union (EU), the eventual conclusion of which would transform our trade relations in the most profound way, and propel us squarely into the liberalised global economy which is rapidly emerging.

We were still getting attuned to the complexity of the task before us, when we received information, which would fill us with foreboding. We received word of the requests by Australia and Brazil to the European Communities for consultations with respect to the EC's Common Organisation of the Market in Sugar, with the attendant implications for all ACP countries which export sugar to the EU.

For Guyana, the concern was heightened by the fact that the requests emanated from Australia, a fellow longstanding member of the Commonwealth and from Brazil, its neighbour to the south, with which it enjoys the most excellent relations.

I must acknowledge that both Australia and Brazil are on record as stating that their approach to the EC is in no way intended to call into question the ACP beneficial exports of sugar to the EU under the sugar protocol and the special preferential sugar agreement. However, one of the reasons I am here today to make this statement is in no small measure linked to the traumatic experience we in the Caribbean had with our banana industry. Following the challenge to the EC banana import regime by some non-ACP exporting countries, similar assurances were given to us. In the end those assurances brought us no comfort. I will say more about that later.

My colleague from Mauritius has stated that Guyana and other Commonwealth countries were exporting sugar to the United Kingdom under the Commonwealth Sugar Agreement some 25 years before its entry to the EC in 1975. This longstanding arrangement was transformed by mutual consent and to mutual benefit of the ACP and EU into the sugar protocol with its guarantees of purchase and import, negotiated price and unlimited duration.

The tremendous importance to my country of access for its sugar to the EU market on those terms, cannot be over-emphasised. We export 167,000 tonnes of sugar to the EU under the sugar protocol and currently a further 25,000 - 30,000 tonnes under the special preferential sugar agreement. These exports make up over 90 per cent of our sugar exports outside of our region and they underpin the industry in a very fundamental way.

The beneficial terms under which our exports of sugar under the protocol enter the EU have been sanctioned by the successive waivers granted by the multilateral trading system to the ACP-EC Agreements. And at the conclusion of the Uruguay round of multilateral trade negotiations which gave birth to the World Trade Organisation, the EC in a footnote to its export commitment, explicitly provided for the exclusion of exports of sugar of ACP and Indian origin from its reduction commitment.

What is the volume of EU imports of sugar from the ACP countries provided for under the beneficial trade arrangements sugar protocol? Some may say a mere 1.6 million metric tonnes in the context of large producers such as Australia and Brazil. However, for our small developing countries, in which sugar is the dominant agricultural activity and in some cases the dominant economic and export activity, those 1.6 million tonnes represent our lifeblood. We will commit a grave social injustice to our people if we do not do all in our power to ensure the preservation of those arrangements and are confident that countries such as Australia and Brazil fully appreciate why.

Guyana is in no way questioning the right of Australia and Brazil, as members of the WTO, from pursuing what they perceive to be their national interests. At the same time, the Government of Guyana on behalf of the people of Guyana is equally obliged to seek to ensure that at the end of these consultations - and we sincerely hope that consultations will suffice - any resolution will not have devastating effects similar to those experienced by some ACP countries in the Caribbean, particularly the Commonwealth of Dominica whose economy was ruined as a result of the outcome of the WTO ruling on the EU banana import regime.

Guyana is a young developing nation grappling with a very fragile economy and is severely constrained by an inadequacy of technical and financial resources. Even in such circumstances we are making every effort to be engaged in negotiations with the EU for a new WTO compatible trading arrangements, in hemispheric negotiations for the Free Trade Area of the Americas (FTAA) and in the post Doha Negotiations in the WTO. We are now confronted with the possible implications for our exports of sugar to the EU as a result of the demarche by Australia and Brazil. This casts a pall of great uncertainty over the future as it could call into question the very basis on which we have predicated our chances of meeting the challenges of the New Global Environment.

Despite the assurances from a longstanding member of the Commonwealth and from our great neighbour to the south, we are very concerned about the likely effect of their action on the future of the arrangements under which our sugar is exported to the EC. I will not seek to elaborate the consequences of any damage, even the slightest, to those arrangements.

The sugar industry in Guyana is critical to the present viability of our economy and the stability of our society. We are in the process of diversifying and expanding our economy so that sugar's historical dominance is reduced and it takes a more balanced place in the life of the nation. However, this is a process, which not only takes time but requires for its achievement that sugar's vital contribution is not disrupted while growth and diversification are pursued. And in this connection I should perhaps make clear that our sugar industry is not subsidised by the Government and therefore there are no deductions to be made from the sum of the vital contribution the industry makes.

It is hard to convey to representatives of countries with large and well-diversified economies how vital sugar is to us. Proportionately our sugar industry is immensely more important to us than the sugar industries in Europe, Brazil and Australia are to those great countries.

Consider the facts. Sugar contributes 20 per cent Guyana's total GDP and over 50 per cent of its agricultural product. In Guyana sugar employs directly and indirectly 26,000 people who provide for an estimated 150,000 out of a total population of 750,000. Do the arithmetic and consider the human consequences of failure in our sugar industry.

Sugar, remember also, is the largest net earner of foreign exchange. Without these earnings the economy would be subject to huge problems of currency instability and inflation. In 2002 sugar will earn US$122 million in foreign exchange out of the nation's total merchandise exports of US$489 million. Of that US$122 million, exports to the EU account for US$94 million. Again, do the arithmetic, translate the figures proportionately to your circumstances and consider the consequences of sugar's failure for Guyana. These are the hard economic facts. However, I do not need to tell you that sugar's multifunctional role extends in often not easily quantifiable ways to providing infrastructure and social and technical services throughout our rural communities. Without the sugar industry these communities would fail, this releasing a flood of internal refugees to already overcrowded urban areas. It is not too much to say that the social coherence and the essential environmental integrity of the country would be threatened with serious dislocation in the event of such failure.

In these circumstances I do not think I would be exaggerating in saying that, to appreciate the effects on us of compromising our sugar industry, countries like Brazil, Australia and Europe would have to contemplate the sudden failure of perhaps a score of their major industries or businesses all at the same time. Just stop a moment and think of that.

We are fully aware in our country that the immense contribution of sugar has to be supplemented as quickly as possible so that a healthier balance is achieved in the economy. The sugar industry itself, also, is fully aware that it must move rapidly with the times to become more cost-effective and competitive. Both these processes are taking place. Far from being complacent in our present situation we are desperate to make progress with our plans. We are seeking to grow and diversify the economy and the sugar industry is embarked on a programme of modernisation with major investments already earmarked for a new factory, for achieving substantial gains in productivity and for adding value to primary production. But all these strategically all-important objectives depend on preserving sugar's income base represented by our beneficial access to the European Market through the sugar protocol.