Examination of Witnesses (Questions 94-99)
26 APRIL 2004
MR EDWARD
CHILESHE SEFUKE
AND MR
JULIAN PRICE
Q94 Chairman: Thanks to Mr Sefuke and
Julian Price for coming to join us. It would be helpful if you
could give us a little sketch of the organisation and how it is
composed, how it works and who it represents. Mr Sefuke?
Mr Sefuke: First of all, this
is a good opportunity to clarify something that has been said
this afternoon about the LDC agreement. Unfortunately, there is
no such agreement. We would like one but one does not exist. It
is a unilateral offer that is not secure at all and that is one
of our concerns. In terms of the structure, I think we took it
upon ourselves when we were first given this facility but we knew
very quickly that there would need to be some kind of organisation
in the absence of an agreement. I recall that Zambia did take
the initiative to get everybody together and draft a framework
agreement which is on the LDC side something that binds us together
and regulates how we ship and share the quantities that are available.
Much later on, on the sidelines of Cancun, our ministers who were
present in Cancun met and decided that we should formalise it
beyond the commercial arrangements of shipping schedules into
a more formal structure. Arising from that meeting a Brussels
committee of ambassadors was set up, which is also supported by
a secretariat that we have recruited to help us with the secretarial
work. We realise the importance of the producers in our countries
as stakeholders and they were brought in, first of all, at their
own level and then jointly with us. Also, the London Commercial
Group, brokers and other people helped us. That is where Julian
is the secretary of the group here. That is largely how the group
is organised and from that we are able to look at what is affecting
us to try and develop common positions and also jointly engage
other people in the industry, other stakeholders, and we have
been actively doing that perhaps even more than other players.
Q95 Chairman: You have outlined the group,
its aims, how it has come together. You have told us very clearly
that there is not an LDC agreement and thirdly you said here is
an opportunity for change. We want to be involved in that opportunity
for change. What way of reform would best suit your members? What
are you campaigning for?
Mr Sefuke: Perhaps I should start
with what is not ideal. What we think will not work for us is
a full price liberalisation because, much as some countries like
mine are efficient producers, we know that we would be flooded
out of the market by the likes of Brazil and Thailand. It is not
a feasible option. It is not good for us; it is not good for the
EU industry. We think it probably should not even feature because
it is not a feasible option. It is just clouding the options that
are available. The same reason why that far back we realised that
there was need for some organisation is the reason that we believe
that, even in the options that are available today and realistically
looking at the dynamics within the EU, whilst appreciating the
quota free, duty free access that has generously been offered
to us, some level of organisation of a managed market would perhaps
be a compensating factor for that one thing that we lack, a binding
agreement. For as long as our actions jointly with other stakeholders
do give a reasonable level of price guarantees and stability,
we would be able to attract the investments that we ordinarily
cannot attract, given that our markets are not binding and there
is no agreement.
Q96 Chairman: You are arguing very strongly
that total liberalisation is not possible, that you would be forced
out by other competitors. In a sense, I think you are saying that
you would like to see quotas of some kind and some price guarantees.
Are you in a position to put any figures on that?
Mr Price: I do not think we are
asking for a guaranteed price in the sense that the ACPs under
the sugar protocol have a guaranteed price. The LDCs are asking
for a remunerative price to obtain in the EU market and for the
LDCs to have duty free access up to a limit in order for them
to benefit from that. On the price itself, I think we might have
to take the Mike Blacker defence and say that we might be in some
sort of negotiation here. The LDCs are a diverse group. Some amongst
the LDC countries are quite efficient and have good access to
ports. Mozambique may be one country. Some are land locked with
difficult access to ports but nevertheless produce sugar economically
in their countries. Some have neither of those. To put a single
figure on the price would be very difficult but together the LDCs
have added up their net exportable surpluses and they would like
the limit to be at that limit and for that limit to grow by 15%
a year. Those are in the memorandum that we submitted to you.
This is the quantity of sugar that is currently being exported
from net exporting LDC countries. Not all produce sugar and some
are net importers. This is the quantity that is currently available.
To provide a key for the regime to be managed for the benefit
of all stakeholders, the EU, LDC and ACP, the LDCs have proposed
to cap their current net exportable surplus, to ask that that
increases by 15% per annum which would provide for an enormous
boost to investment, in return for a regime that does not necessarily
guarantee but gives remunerative prices.
Q97 Mr Jack: Is that position compatible
with the Everything But Arms agreement?
Mr Price: It requires an amendment
to Everything But Arms. As Edward said, it is not an agreement;
it is a unilateral decision. It would require an amendment to
the EBA initiative.
Q98 Mr Jack: Do you find that the Commission
in the light of that are beating an enthusiastic path to your
door, saying, "We would like to change the position. We have
nailed our colours to that mast"? You are asking them to
fundamentally change the EU negotiating position, are you not?
Mr Price: It depends who you talk
to. There is a range of opinions in the Commission.
Q99 Mr Jack: That is a wonderfully political
answer but I suppose you are talking to politicians.
Mr Price: It is true.
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