4 Commission's options
28. The European Commission's Communication to the
Council of Ministers and the European Parliament on the EU sugar
regime and its future prospects,[27]
which was accompanied by an impact assessment,[28]
does not make a specific proposal for reform, but groups a range
of possible options into three broad approaches as a basis for
political debate. These three policy orientations are headed:
- extension of the present regime
beyond 2006
- reduction in the EU internal price
- complete liberalisation of the current regime.
29. The Commission's own summary of the options is
set out below. Within its Communication, the Commission does not
explicitly indicate a preference for one option over the rest,
but it does say that "any reform of the sector would have
to follow the fundamental principles of the CAP reform initiated
in other sectors, i.e. bridging the gap between domestic and world
market prices and shifting support from product to producer".[29]
Extract from European Commission's press release on options for reform of the EU sugar regime[30]
1. An extension of the present regime beyond 2006
This would consist of keeping intact the current CMO [Common Market Organisation], based on flexible quotas and price intervention. The EU market would be open to import quantities, according to the various international commitments already agreed or to be agreed in the future. Custom duties, internal prices and production quotas would be reduced. The Extended Impact Assessment also addressed the impact of a request by the Everything But Arms (EBA) countries to implement that agreement through a fixed quota system. [Note: this covers the 'fourth option' listed in the impact assessment].
2. A reduction in the EU internal price
In this scenario, once the levels of imports and production have stabilised, production quotas would be phased out. The internal market price would be allowed to adjust itself to the price of non-preferential imports. However, lowering the level of the EU internal price would make the EU market less attractive for the least competitive sugar producing countries. The impact of this policy option on the world trade patterns was given particular attention. To soften the effects of the reduction in the EU sugar prices, this scenario also looked at the possibility of allowing sugar producers to benefit from the single farm payment, in line with the June 2003 CAP reform. Finally, the impact of this scenario on the revenue from sugar for countries currently exporting sugar to the EU has been assessed.
3. A complete liberalisation of the current regime
The domestic EU price support system would be abolished and production quotas would be abandoned. The impact on the EU sugar market, of the complete removal of import tariffs and quantitative restrictions on imports, has been assessed. As with the price reduction scenario, the possible introduction of income support for EU producers, as well as the impacts of liberalisation on world trade and the implications for the revenue from sugar of countries currently exporting sugar to the EU have been assessed.
|
27 Communication from the Commission to the Council
and the European Parliament accomplishing a sustainable agricultural
model for Europe through the reformed CAP-the tobacco, olive oil,
cotton and sugar sectors (COM(2003)554) Back
28
European Commission, Reforming the European Union's sugar policy:
Summary of impact assessment work, (Brussels, 2003) Back
29
COM(2003)554, p 3 Back
30
"Commission opens discussion to reform the EU sugar regime",
European Commission press release IP/03/1286, 23 September 2003 Back
|
