The EU position represents bad faith-President Jagdeo
July 3, 2004
President Bharrat Jagdeo said yesterday, that the issue of the proposed price cut for ACP sugar producing countries and the implications for the region would receive serious attention at the CARICOM Heads of Government meeting this weekend.
He said that the issue is not just about sugar but also an issue of bad faith by the European Union in the negotiations.
“It is an issue of trust,” he told reporters at the Office of the President yesterday. “It’s going to lead to a lack of trust.”
The President recalled that the EU had launched the Everything But Arms (EBA) agreement which undermined the Cotonou agreement even before the latter’s “ink had dried.”
He stated that although the ACP sugar producing countries had protested, the EBA agreement still went through.
The President said the ACP countries were given the assurance that the preferential arrangement for sugar would last up until 2008.
In this instance, the ACP countries are now faced with the proposed 20 per cent price cut next year when it is currently negotiating the Economic Partnership Agreement.
President Jagdeo noted that the ACP sugar price was tied in with the price the EU farmers receive for their beet sugar.
The concerns of the EU farmers are being met, he said, but the ACP countries are being told that the European Development Fund (EDF) would address their concerns.
President Jagdeo stated that he did not have too much confidence in the EDF given the experience of the Linden Economic Advancement Project (LEAP).
He stated that LEAP has to be supported by the national treasury since it takes 90 days to process an invoice in Brussels. He said the EDP did not amount to much because of the limited funds available.
President Jagdeo pointed out that the region would be hard pressed to accept any new position put forward by the EU given the past experiences.
This is not only at the ACP level but also the WTO, he said.The Head of State noted that sugar accounted for 16 per cent of Guyana’s GDP and one-sixth of the nation’s foreign exchange earnings. He added that some 18,000 persons are directly employed in the industry and about 15,000 indirectly.
“The impact on the economy will be great if the regime goes forward,” he said.
The price cut, which starts at 20 per cent and is staggered to eventually 37 per cent, will cost Guyana some US$35 million annually.
President Jagdeo said the overhauling of the Skeldon sugar estate is intended to cut the production cost of sugar from US$0.17 per pound to US$0.10 per pound.
This was being done with the hope that there would be a greater breathing space for the industry before the review of the arrangements was done, he said.
The President pointed out that the ACP producing countries had already agreed to a price cut many years ago when the arrangement was put in place but this was in exchange for a contract of an indefinite duration.