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The Week in Europe By David Jessop The final battle to determine how much money the European Union (EU) will make available for the restructuring needs of all eighteen African Caribbean and Pacific (ACP) sugar producing nations is now underway in Brussels. Last year the EU decided to reduce the price its pays for ACP and EU sugar by 36 per cent over four years starting in mid 2006. It did so in response to a World Trdae Organisation (WTO) ruling following a complaint by Brazil, Australia and Thailand. But whereas a Euro 7.5 billion long-term restructuring fund was rapidly agreed for European beet sugar producers and refiners, just Euro 40m was made available for ACP cane farmers for 2006. Since then a fierce debate has been raging over the so called accompanying measures for ACP producers which in turn has become a part of an inter-European battle over budgetary issues that for the most part have nothing to do with sugar. As matters now stand, sources suggest that far from making available the Euro190m per annum from 2007 onwards that Europe’s Trade Commissioner, Peter Mandelson, and its Agriculture Commissioner, Mariann Fischer Boel, announced in the run up to the WTO ministerial meeting in Hong Kong last December, the sums now being considered are substantially less. Although no final decision has been reached, the figure under consideration within the European Commssion (EC) for inclusion in the European Union’s 2007-13 budget looks likely to start at Euro 140m in the first year and climb to a maximum of Euro 170m towards the end of the seven year period. If these figures hold, this will mean that the majority of the financial support for ACP producers will come after they have suffered the full effect of the price cuts. That is to say the support will be backloaded rather than frontloaded as ACP producers require. In private, Commission officials claim that the reason that the figures being discussed are below the announced Euro 190m per annum is because the ACP recipient states “lack absorptive capacity”. However their counterparts in member states suggest that the original figure announced by Commssioners was never based on any sound calculation but was simply a ploy “to ease decision making” at the WTO’s Hong Kong meeting. One consequence is that Europe’s Trade Commissioner, perhaps fearing a backlash, is understood to now be arguing to his colleagues that the figure could be slightly higher than the Euro 1.1 billion in total that is being proposed over the seven year period for ACP producers. He is also suggesting that frontloading is essential. This seemingly large figure is still far from the Euro 1.8 billion that one member state’s studies believe is required to effect a viable transition. Unfortunately, trying to make the Caribbean case with the European Commission, with all of Europe’s member states and the European Parliament for a just settlement has become very difficult. The European Commission has either as a matter of strategy or by default, divorced the decision on the quantum of support for sugar from the agreement on the regulation that establishes the criteria determining its allocation. Put more simply there is in effect a two-track approach: one for the money and another for the regulation. Worse it seems that both processes bear no relationship to the amounts indicated in the multi-annual plans that have been produced at the express request of the EC by most ACP protocol nations to identify need. What this means is that the final decision on the amount ACP sugar producers will receive has become a function of an inter-European Union process rather than need. Thus the most important aspect of the final decision – the overall sum available for transitional support - will largely be decided on the basis of political horse-trading between the EC, the Council and the Parliament over the EU's budget. As matters now stand Europe’s member states and the European Parliament have been given no clear idea by the EC as to the overall quantum of need on a country-by-country basis and have not been made aware that each ACP nation requires a different type of programme and possibly different delivery mechanisms. This means that both parties to the co-decision on accompanying measures for sugar have no objective basis whatsoever to decide on the most appropriate criteria to determine who gets what or the quantum of support that should be included in the budget. Just as importantly, the EC has been unable to give any assurances that the body that delivers development assistance, EuropeAid, is prepared procedurally with the necessary legal cover to deliver without seeking timely derogations, the varied mix of public private schemes for sugar required by some ACP states. When Europe offered all eighteen ACP sugar producing states Euro 40m for for 2006, producer nations made clear that this was only acceptable if credible assistance was forthcoming in the longer term. They also argued in Hong Kong that getting the level of assistance wrong could have very serious repercussions and that they would not join any consensus on a final WTO agreement without a satisfactory settlement on sugar. What all of this seems to point to is a rapidly diminishing level of coherence on the part of the EC towards the Caribbean. In short order it has without any substantive consultation produced a policy paper on the Caribbean that argues for enhanced political dialogue and new approaches to development; is engaged in the third and final phase of Economic Partnership agreements that are meant to be developmental and encourage regional integration and growth; and is seeking closer European co-ordination to halt the 300 tonnes of cocaine and weapons that come to Europe via the Caribbean each year; while at the same time undercutting the region’s development prospects and stability by failing to guarantee a successful transition in sugar. As this is being written a high-level sugar delegation from the region is returning home from talks in London, Brussels, Vienna and Helsinki. Coincidentally so too is the Brazilian President, Ignacio Lula da Silva who has been on a state visit to the United Kingdom. Both might usefully reflect on where a failure to deliver on sugar will leave the viability of the joint British/Brazilian proposal for a meeting of all heads of state to call for a decisive push to complete the WTO Doha Round. David Jessop is the Director of the Caribbean Council and can be contacted at [log in to unmask] Previous columns can be found at www.caribbean-council.org March 10th, 2006 --------------------------------- To help you stay safe and secure online, we've developed the all new Yahoo! Security Centre.