Monday, June 28, 2004

Gya: EU sweetly screwing over developing countries

The proposal by EU Farm Commissioner, Franz Fischler to chop EU sugar prices has been rejected by Chief Executive Officer of the Sugar Association of the Caribbean Ian McDonald, as "unfair and illogical"; and Guysuco's top man, Michael Boast says it is bad news for Guyana.

Fischler's proposal will see sugar prices dropping by 20% next year and down by 33% in 2007.
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"The proposal ignores points repeatedly made by the developing ACP sugar exporting countries and in particular ignores the sanctity of the benefits of the Sugar Protocol as set out in the Cotonou Agreement," McDonald asserted.

He says the proposal to slash sugar prices cuts right across "the reassuring guarantees" given by the EU Commissioners including Fischler himself and Pascal Lammy on the need to give ACP time to adjust.
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He says the proposal deals with reform for reform sake and ignores the real needs of ACP developing countries; ignores the considered views of ACP countries submitted to the EU Commission; and ignores the solemn commitments of the EU in the Cotonou Agreement Article 36 (4) to review the Sugar Protocol with a view to safeguarding its benefits.

McDonald ridiculed the proposal as being based on false assumption and flawed thinking. He notes as one example the comment in the text introducing the proposal saying that the gap between EU and world market prices has grown larger and therefore something is wrong with the EU prices, rather than with the so-called world market price.

"As a global dump-market price, the so-called world price for sugar represents only about half average world cost of production and is well below the production costs of even very efficient world producers [including all those in Europe]." He argued that from such false analysis flows many evils.

McDonald also questioned how many times it has to be said that compensation cannot take the form of "mere one-off development assistance pittances but should be fair, transparent, equitable, quickly and easily disbursed and should be 100% of any loss of revenue and replace the value of any loss of preferences without conditionality and should be producer targeted along the lines of Europe's own CAP system.

"These proposals are blind to the terrible consequences of what was done to bananas in the Caribbean when 'reform' proposals for the Caribbean industry were adopted by the EU," McDonald said, noting that Fischler actually suggests "without shame" specific programmes similar to those introduced for bananas to 'help' ACP sugar producing countries.

He also said that the proposal flies in the face of the EU's utterances that international trading arrangements should reflect the needs of development and provide special and differential treatment for small and vulnerable economies.

He said the proposal would seriously affect plans and programmes, encouraged by the EU, in ACP states to restructure their sugar industries to make them more efficient.

McDonald said the proposal gives priority to the demand of the huge, rich, corporate industrial users of sugar for lower prices and ignore the need of developing countries for stable and remunerative income.
The price of trading with the EU seems to be that they will tell you how much they intend to pay for your product. Contrary to sound economic principles, Fischer intends to force a 33% decrease in the price of sugar by legislative fiat. Where is the decline in demand that would, on its own, produce a decline in prices? It's non-existent. Instead, demand stays steady, or might even be increasing, and rather than cope with prices created by demand, the EU is imposing price controls on Caribbean cane farmers. That's what the Fischer proposal amounts to.

What is clear is that the EU folks are a bunch of socialists who don't have a clue how the market works. So, it seems the Caribbean sugar farmers will make a gift of their labor and product to the EU.

I would like the EU to tell the Arabs who are sitting on all that oil in the Mid East that oil prices must drop by 20% by next year and 37% by 2007. I wonder how many bombs would go off in Brussels after that pronouncement? The Sugar Association of the Caribbean ought to do a Cheney on the EU.

EU motto: what's mine is mine, and what's yours is mine, too ... unless you're sitting on oil in the Mid East.

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