Guyana faces economic ruin if EU sugar regime challenge succeeds
-Rohee tells WTO meeting in Geneva
November 30, 2002
Foreign Trade Minister Clement Rohee says mass unemployment and economic collapse faces Guyana if a challenge to the EU sugar regime at the World Trade Organisation (WTO) was to succeed.
Rohee delivered a statement at the WTO in Geneva, Switzerland last week on the occasion of the consultations with the European Community (EC) requested by Australia and Brazil. The two countries are challenging the EU sugar regime.
The minister, highlighting the attendant dire implications for all ACP (African, Caribbean and Pacific) countries which export sugar to the EU, urged: “In your deliberations and decisions, I ask you not to forget this dimension of the debate, not to forget that what is at stake is nothing short of economic collapse, loss of a nation’s lifeblood.”
Rohee pointed out that sugar contributes 20% of Guyana’s total GDP and over 50% of its agricultural produce. Furthermore, it directly and indirectly employs 26,000 people “who provide for an estimated 150,000 out of a total population of 750,000”. It is also the largest net earner of foreign exchange and this year is expected to bring in US$122M out of US$489M - the value of total merchandise exports. Of the US$122M the sale of sugar to the EU accounts for US$94M.
He noted 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, Rohee noted, was transformed by mutual consent and to the mutual benefit of the ACP and EU into the Sugar Protocol with its guarantees of purchase and import, negotiated price and unlimited duration.
Guyana’s minister asserted: “The tremendous importance to my country of access for its sugar to the EU market on those terms, cannot be over-emphasised.” He noted that Guyana exports 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, adding that those exports make up over 90% of the country’s exports outside of the CARICOM region and “underpin the industry in a very fundamental way.”
Rohee also pointed out that “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.
Moreover, at the conclusion of the Uruguay Round of multilateral trade negotiations which gave birth to the WTO, the EC in a footnote to its export commitment, explicitly provided for the exclusion of exports of sugar from ACP countries and of Indian origin from its reduction commitment,” he stated.
Rohee underscored, however, that 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,” Rohee declared, “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....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.”
Rohee said further that Guyana with its fragile economy and inadequacy of technical and financial resources is making efforts to be engaged in negotiations with the EU for 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.
Against that background, Rohee contended that “we are now confronted with the possible implications for our exports of sugar to the EU as a result of the demarche (step) 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,” Guyana’s foreign trade minister posited.