EU sugar deal sweetens life in poor nations
At worst, the reform could greatly reduce Ireland’s sugar industry. A lot of jobs at Carlow and Mallow could be lost, and a lot of people, including farmers, would be looking for compensation from Brussels, if the subsidies their livelihoods depend on are pulled.
There’s backing in Brussels for the reform of the costly sugar regime, because the sugar bill could shoot up 15% when 10 more member states join from eastern Europe and the Mediterranean next May.
But the main pressure to reform comes from the World Trade Organisation (WTO), in which Australia, Brazil and Thailand have challenged the EU’s sugar subsidies, maintaining they “grossly distort” world trade in sugar.
However, supporters for the EU sugar regime can take heart from the recent collapse of the WTO trade talks in Cancun, Mexico..
It was the poorest countries in the world who pulled out of the talks. Perhaps they are now seeing through the real motives of the free trade cheerleaders such as the US, Australia and Brazil.
By choosing to define itself as developing, Brazil seemingly hopes to keep out imports with high tariffs, to protect its highly advanced agricultural sector.
Brazil led a Group of 21 countries in WTO talks, making proposals ostensibly designed to reduce poverty in some of the most needy countries.
But their motives must be suspect; liberalisation of trade is of far more benefit to big exporters such as the USA, Australia and Brazil, than to countries really in need. Iinstead of freeing up trade, the WTO could help countries in need with measures to protect their markets from imports, while building up their domestic markets, But, first, the WTO must establish clear and objective definitions of what constitutes a country in need.
But the sugar trade is a clear example of where the WTO threatens the world’s poorest countries by championing Australia, Brazil and Thailand’s challenge to EU subsidies.
If the challenge succeeds, the biggest losers will clearly be the African, Caribbean, and Pacific countries whose sugar can enter the EU market duty free under preferential import quotas.
Swaziland, Zimbabwe, Mauritius, Guyana and Fiji are some examples of the ACP countries using this concession to sell sugar into the EU at three times the world sugar price.
For example, Brazil’s tiny neighbour, Guyana, depends on its preferential access to the EU sugar market for 20% of tis total GDP and over 50% of its agricultural production.
Its sugar industry directly and indirectly employs 26,000 people, who provide a living for 150,000 people out of a total population of 750,000.
EU farm commissioner Franz Fischler’s proposed liberalisation of the EU sugar regime would benefit only a few countries, especially Brazil, Thailand, Australia or South Africa.
They have low production costs with which the ACP countries cannot compete.
More than 95% of the ACP income benefits from the high EU price for sugar go to developing countries; sugar traders get less than 5% of the income benefits.
In comparison, up to 80% of direct aids for developing countries are repatriated back to the donor countries, with only a minor slice reaching the poor people who need help.
Whatever about the fate of Irish factory workers or sugar beet growers, the survival of the fittest demanded by free trade supporters will cause real suffering in the poorest countries, if the EU gives into the World Trade Organisation attack.
