Blair backs Caribbean leaders over EU sugar plan

British Prime Minister Tony Blair has promised to support a proposal that would ease the impact of the European Union’s planned cut in sugar prices for Caribbean producers by slowly phasing in tariff reforms, the Guyanese government said today.

The EU has proposed to slash the price of sugar by 39% beginning next year, but sugar producers in the 78-nation African, Caribbean and Pacific trade group, or ACP, last week presented a proposal to EU agriculture ministers for a 19% reduction.

Mr Blair, who currently holds the rotating presidency of the European Union, met 10 Caribbean leaders today.

He promised that Britain “will seek to lengthen the transitional period for the EU sugar reform proposal, push for an increase in transitional assistance and examine the issue of greater market access for the Caribbean”, Guyana President Bharrat Jagdeo’s office said in a statement.

It was not known whether leaders discussed the ACP’s proposal to soften the price reduction to 19% from 39%.

The World Trade Organisation ruled last month that EU sugar subsidies make it impossible for producers in other countries to compete.

If the European Union does not end the subsidies by May 22, 2006, it could face billions of dollars in sanctions.

The EU has offered the 19 ACP sugar producers $40m (€33.9m) to help cushion the impact of reform, but the ACP this month called the compensation “paltry”.

Total losses in export earnings for the ACP sugar group would be up to $352m (€298m) a year, the organisation said.

Barbados, Guyana, Jamaica and Trinidad – the Caribbean’s leading sugar producers – say they will lose $110m (€93.1m) annually if prices are slashed 39%.