Fuente : World Bank
http://www.worldbank.org

EU Commission Announces Major Overhaul Of Sugar Trade Rules

/noticias.info/ The European Union's head office announced sweeping changes Wednesday to its 40-year-old system for protecting sugar growers, despite criticism from domestic producers and exporters from some of the world's poorest nations, reports the Associated Press.

The European Commission proposal will cut guaranteed prices to European producers by 39 percent following a successful challenge to the subsidy system at the World Trade Organization by Australia, Brazil and Thailand. The WTO ruled in April that the EU's system of subsidies to guarantee high prices for European sugar producers was illegal. It agreed with Brazil, the world's biggest producer, which argued that the EU system depressed world prices and made it impossible for others to compete. EU sugar prices are more than four times higher than the global market rate and are protected by massive import tariffs. Brussels also pays out export subsidies to get millions of tons of sugar a year off its market, helping to keep EU prices high and support Europe's farmers.

Dow Jones further writes that in order to ease the pain of the reform, EU agriculture commissioner Mariann Fischer Boel offered to help inefficient EU factories under threat from the price cuts end their sugar production with a one-off 730/ton payment for their production quota sometime over the next four years. More efficient sugar producers in France, Germany and the UK are expected to survive the reforms. Sugar businesses in Finland, Ireland, Spain and Italy are expected to shrink dramatically, or shut down. The moves will open up the EU to sugar producers in the developing world from 2009, with sugar imports seen up as much as 70 percent to 3.9 million tons by 2012.

Reuters meanwhile reports the world's top three sugar cane exporters, Brazil, Thailand and Australia, welcomed the reform of Europe's heavily subsidized sugar industry, but Caribbean nations said it would cost them millions of dollars in lost revenue. Brazil, with 40 percent of the free world market, is eventually expected to fill much of the vacuum left by the EU in international trade. Thailand, the world's second-ranked exporter, said producers outside the European Union would stand to gain from the overhaul.

The Associated Press further writes in a separate piece that Caribbean sugar producers lambasted the EU proposal, saying the change will devastate their fragile economies. Caribbean sugar producing countries could lose more than $100 million a year due to the cuts, said Ian McDonald, the Director of the Sugar Association of the Caribbean, which represents sugar companies throughout the region. McDonald said Caribbean producers would lobby hard to prevent EU governments and the EU Parliament from approving the proposal. His association has also vowed to challenge the cuts at the International Court of Justice. Caribbean producers are calling for smaller cuts and more time to adapt to the changes.

Dow Jones meanwhile notes that the European Commission's sugar reform plans will have the full support of the UK as it takes over the EU presidency, which may increase the controversial proposals' chances of survival. The UK is set to take over the rotating presidency of the EU July 1. The reform measures would need the unanimous consent of the 25 member states to be adopted and would also have to be approved by the European Parliament. But with only eight of the 25 EU member states likely to go unscathed after the ambitious sugar reform plan, reaching agreement in time for the WTO ministerial meeting in Hong Kong next December may prove a challenge for Blair, writes the news agency. The Associated Press adds the Commission hopes the changes will be approved by the 25 governments at a meeting of farm ministers in November.

In other trade developments, Agence France Presse reports that WTO members on Wednesday played down a July negotiating target they set earlier this year, saying they expect little to emerge from a key meeting next month. Western trade diplomats told AFP that they no longer expected late July's so-called "first approximation" meeting to draft guidelines for a treaty to reduce global trade barriers, which will be under discussion at a WTO summit in Hong Kong in December. July will simply see a "stocktaking exercise", said a diplomat who took part in a meeting earlier this week of key WTO members. "The real focus is Hong Kong and that's what everybody has really got their eye on," the diplomat said. notas_de_prensa_archivo