ACP Divided Over St Kitts – Nevis Sugar Quota

Sunday, January 7th 2007
The African Caribbean and Pacific (ACP) group has to take a decision on whether the St Kitts sugar quota will remain in the Caribbean or be distributed among all the members of the ACP group.

St Kitts and Nevis has closed its sugar industry in the face of the European Union decision to cut the price of sugar by 36% over a four-year period beginning last year.

The entire ACP group has been affected by the price cuts and its members are divided over whether or not shortfalls in sugar quota should remain in the Caribbean or be distributed. Minister of Foreign Trade and International Cooperation Dr Henry Jeffrey said in an interview earlier this week that a decision had to be taken before the end of this quarter. “If we don’t come to agreement among ourselves [ACP members] the European Union would have to make it. They could decide they would not give the quota to anyone or they could do what they did with the Barbados quota – they distributed it between Tanzania and Zambia. It was not allowed to remain in the region.”

He said Zambia feels that the only way it could improve its quota is if it gains from the shortfall of other sugar-producing countries and it is not likely to support Caricom’s position. He said a decision must be taken ahead of a position paper being written on the sugar protocol and the Economic Partnership Agree-ments (EPAs) arrangements which must be completed by June.

Reiterating Caricom’s position that the St Kitts and Nevis quota should remain in the region and not go the route of the Barbados quota, he said the Pacific and the African countries were of the view that the shortfall in quotas should be distributed in the traditional way – across the entire ACP group.

Jeffrey feels that it could be argued that the Caribbean has a case in asking that the St Kitts and Nevis shortfall be met by other sugar producers in the region in keeping with the current Economic Partnership Agreements (EPAs) negotiations between the European Union and the ACP grouping, which has as one of its themes regionalism and regional integration.

He said Caricom was currently operating as a single market moving towards a single economy and sugar production in the Caribbean was a single economic activity through its production methods which included the labour market. Cane cutters in particular move from one country to another within Caricom, particularly Guyanese who went to cut cane in St Kitts and Nevis during the harvesting season before that Caricom country ceased production on account of the slash in sugar prices. Because of the single economic space, he said, the St Kitts and Nevis quota should remain in the region. Quite apart from losses caused by temporary shortfalls, Jeffrey said that since the Sugar Protocol came into force, Caricom had lost over 44,432 tonnes of its original quota, to other beneficiaries in the ACP.

The region’s loss of the original quota, he said had tremendous impact on a poor, small and vulnerable country such as Guyana, which is attempting to use the accompanying measures provided by the European Union for the price cuts in sugar for ACP countries, as it tries to restructure and diversify its rural economy and increase sugar production.

Unlike many other markets, he said, Caricom’s small sugar market is satiated and Guyana needs the preferential European market simply to survive as well as its reform efforts. Meanwhile, the fourth Meeting of Caricom sugar stakeholders would be held on January 11 and January 12 and the issue of the shortfall in the St Kitts and Nevis quota, a possible shortfall in the Trinidad and Tobago quota and Barbados position on its shortfall in which the island country temporarily gave up its quota, are to be discussed.

Other issues to be addressed include the accompanying measures that the EU is providing to the ACP grouping for the cut in price for sugar in the European market; Caricom countries action plans for the sugar industries; guaranteed price negotiations for 2006 and 2007; sugar in Cariforum; the status of preparation for a Caricom sugar cane policy; and prospects for sugar refining in Caricom.

Another meeting is scheduled to be held on January 13, which would include the Dominican Republic and which would look at Cariforum’s position on how sugar should be treated in the Economic Partnership Agree-ments negotiations. (Miranda La Rose)

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