Sugar proposal dispute
CARICOM to involve EU Parliament
Kaieteur News
July 10, 2004
President Bharrat Jagdeo, just back from the CARICOM Summit in Grenada, disclosed that the regional Heads have agreed to increase their diplomatic representation at the level of the President of the European Commission and the President of the European Parliament to counter the proposal by the European Union to slash sugar prices.
The Heads will also increase contacts with sympathetic governments within the EU.
President Jagdeo noted that the EU has, in the past, pushed through their proposals in contravention to commitments they had already made.
The Trade Ministers around the region will follow up the efforts by the CARICOM Heads.
The EU recently announced that it would be reforming its sugar regime and would be lowering the price paid for sugar to its suppliers from the ACP countries of which the CARICOM sugar producing countries are members. Even the producers of beet sugar would be affected. They would however receive some 60 per cent of their earnings by way of subsidy. No such concession would be granted to the ACP countries.
The European Union’s new proposal on sugar will have devastating effects on sugar producing countries around the world and would not be in keeping with its commitment to halve the world’s poverty by the year 2015, Guyana’s Head of State has said.
“There are many surprises we are going to be faced with,” President Bharrat Jagdeo stated at a press conference he hosted at the Office of the President yesterday.
“The world is increasingly becoming selfish. Countries that took vast sums of money from countries like ours during colonization – the period when our ancestors worked as slaves and indentured labourers - do not have any regard for historical ties. They will do what is in their best interest.”
The President urged that the people in the region must be optimistic and keep the sugar industry alive. He added that they must not allow pessimism to dominate them.
President Jagdeo said that CARICOM’s position on the sugar issue is clearly spelt out.
One example is the Everything But Arms agreement which went through without consultation with the region and which undermined the Cotonou agreement.
“We’re very mindful how the EU acted unilaterally in the past. CARICOM is very firm and strong in its criticism of their act of bad faith,” the President said.
The Head of State noted that the Regional Negotiating Machinery (RNM) has worked effectively to coordinate the region’s negotiation position.
He pointed out that the countries may be engaged in multiple negotiations and it would be hard to follow these up as individual countries because a country could have been lacking in the human and financial resources.
He said the RNM has been working with the National Coordination Committees, Trade Ministries and the Heads themselves to distill the various positions and take them to the international negotiating forum.
“The RNM helps us to be consistent. Countries in an integration movement could have different positions and this could come back and haunt us. Because of this body, we have managed to effectively coordinate our positions,” he stated.
President Jagdeo suggested that to sway the public sentiment in the sugar producing countries and the developed states, efforts would have to be made to engage the trade unions and private sector.
He pointed out that the way the EU, in its new proposal, offered to compensate the European beet farmers and not those in the region’s sugar producing countries was discriminatory.
President Jagdeo said the countries in the region cannot afford to be pessimistic over the issue.
He noted there were some calls, locally, for Guyana to get out of the sugar industry but he declared that this would be difficult.
He stated that the sugar industry made up 16 per cent of Guyana’s economy.
“If this goes, then foreign exchange, too, will be lost.” And this is linked to the exchange rate and inflation.
“It will affect all of society,” he said.
President Jagdeo described the EU proposal as “too steep” and “too early”.
The President said the government is being questioned on its decision to plug huge sums of money into the Skeldon sugar estate project while at the same time ignoring the bauxite industry. Some posited that the motive was political, President Jagdeo said.
He stated that this is the wrong perception since the government has been allocating US$10 million annually for the bauxite industry when, for the comparable period, no funds were placed in the sugar industry.
The sugar industry secured money through the sugar levy.
President Jagdeo said the Skeldon project would be linked to co-generation, which will result in savings on Guyana’s fuel import bill. It will also have a refinery and distillery in the long run.
He noted there have been calls for the diversification of the sugar industry but he warned the mistakes in the past would not be repeated.
Referring to the failed dairy and tilapia projects, he stated that the sugar industry would be diversified but the diversification would stay within producing sugar products.