The Week in Europe

By David Jessop

 

Much that has been written and said in the past few weeks about the implications for the Caribbean of the reform of the EU sugar regime lacks understanding of the European political process. 

 

Thinking is either fatalistic or continues to focus on changing the policy of the European Commission (EC) or its Member States. It fails to recognise that the EC’s approach on sugar is largely accepted and the issue for the region is now about how to influence the debate on the detail. 

 

Worse, there seems to be little awareness that the region’s most important ally in making amendments may now be the European Parliament because of its powers of co-decision on the budget and on the so called accompanying measures for the ACP. 

 

On June 22 the European Commission made public a number of documents. These included three draft regulations (legislative proposals) relating to the restructuring of the EU sugar regime, the proposed compensation package for EU farmers, and support measures intended to help ACP countries adjust to the severe price cuts being proposed. In addition the EC published a communication (policy paper) on the proposed new EU regime and two staff working papers.

 

Together these documents represent the start of a legislative procedure involving the Commission, Europe’s member states and the European Parliament and their various working groups and committees. Publication marked the end of a phoney war of leaks, pre-positioning and special pleading and the start of a process that Britain, the current President of the EU, hopes will conclude with agreement on November 22.  

 

To this end European agriculture ministers met on July 18 for what is known as an orientation debate. This formally establishes in Council the position of member states and leads to further political discussion aimed at achieving a compromise before any contentious issue goes to a vote.

 

In this meeting it became clear that most European nations support the EC’s basic reform proposal and the need to comply with WTO requirements. However, some differed over important detail such as the level of the price cuts proposed, the period over which they should be introduced and the size of the compensation package for EU farmers. 

 

During the debate most member states supported the EC’s proposal for a single reform framework to 2014 on the basis that it provided stability for both EU and ACP producers. However, some nations, most notably Sweden and Denmark, argued for a more ambitious reform package in respect of price cuts and restructuring and together with the Netherlands, for lower levels of compensation for beet farmers. In contrast Spain, Hungary and Italy argued for more compensation while more generally Italy, Spain, Greece and Portugal opposed the reform package. In contrast the UK, Germany, France and the Czech Republic were broadly in agreement.

 

Further Agriculture Council meetings at which sugar will be discussed from a European domestic perspective are expected in September and October. In between, working group meetings will identify the areas in which agreement might be reached and modifications made to the Commission’s proposals. Although the detail of a final regulation is unclear, most EU member states expect to be able to achieve a final compromise package that includes a longer transition period, reduced or better phased price cuts and changes that meet certain national concerns. 

 

In parallel, discussions are taking place within the EU’s ACP Working Group on the accompanying measures for the ACP: in effect a transitional aid package. This debate is focussed on issues such as criteria for eligibility to receive funding and to some extent the level of support proposed - Euro 40m in 2006 - but sources suggest that no EU member state has challenged the basic assumptions of the draft regulation. The result is that further discussion in relation to the ACP elements of the EC’s proposals is now unlikely until after progress has been made on the overall reform package and the EU budget.

 

All of which suggests that Europe’s member states are unlikely to modify significantly what the Commission has proposed. 

 

If this is correct, it suggests that barring any legal challenges that may be brought by the ACP, the only substantive change that might now be engineered to the benefit of cane farmers is a more substantial and efficient financial package for transitional assistance and restructuring.

 

In this respect, the European Parliament is likely to be the region’s most important ally as it has the right of amendment and co-decision on two of the regulations and the budget. 

 

On July 13 members of the European Parliament held a second hearing on sugar. Amongst those invited to address them were the ACP Ministerial Spokesperson on Sugar, Arevin Boolell, who is the Minister of Agro Industry from Mauritius and the Chairman of Jamaica’s Sugar Industry Authority, Ambassador Derick Heaven.

 

Mauritius’ Minister set out the ACP position while Ambassador Heaven focussed on the accompanying measures. He noted that the proposed Euro40m proposed for 2006 for the eighteen ACP sugar-producing nations was insufficient. It stood, he said, in stark contrast to what was being offered to beet sugar farmers or to the EU’s outermost regions that suffered from structural weaknesses and vulnerabilities as their neighbours in the ACP.

 

He recognised that the European Parliament uniquely had the power to help Europe live up to its development commitments.  “You have”, he said, “the right of co-decision, together with the EU Member States …. you are our single greatest and most vital ally”. 

 

He then went on to put forward four proposals that the Parliament might consider. “We are conscious of the limiting financial ceilings within which you are working”, he said, “but I take this opportunity now to ask you to table a specific amendment to the EU budget line for Adjustment Support for Sugar Protocol Countries”. 

 

Specifically he asked that the Parliament argue for sufficient and predictable levels of funding to meet the restructuring requirements of cane sugar industries across the ACP for the whole period of transition; the use of the EU’s development budget to pay interest to guarantee European Investment Bank loans so as to release capital for investment; the Parliament to call on EU Member States to use the ‘flexibility instrument’ in order to provide additional funds to the EU Budget; and for a special fast track implementation mechanism so that funds can be speedily and effectively delivered.  

 

His remarks were greeted with loud applause from Parliamentarians. 

 

A cynic would say that Europe is happy for the ACP to continue to focus on general principles, issues of legality and the inequity of the European Commission’s proposal. In this way they can quietly complete the detail. Politics, rhetoric and emotion have an important place and there will opportunities for this when EU and ACP Ministers meet in September. However, it is no substitute for quiet and detailed work with the key European institutions involved in the decision making process that needs to be undertaken in the next few months if sugar is ever to become a multi-faceted and competitive industry. 

 

David Jessop is the Director of the Caribbean Council and can be contacted at [log in to unmask]

July 22, 2005

 

 


		
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