Memorandum submitted by the UK Industrial
Sugar Users Group
1. Industrial users of sugar in the UK employ
some 80,000 people with annual retail sales worth more than £15
billion last year. They account for around 1.2 million tonnes
of sugar each year, representing about 70% of UK output. They
are therefore a significant stakeholder in the EU sugar regime.
2. The intention of the European Commission's
proposed reforms of the EU sugar regime is that efficient production
should be encouraged and inefficient production discouraged. There
is some controversy around this, principally regarding the amount
of compensation that should be paid to the inefficient producers
that give up production and leave the industry.
SUGAR REFORM
3. There are two specific points to make
about the sugar reform proposal.
4. First, if the principle behind the European
Commission's proposals is accepted, namely increasing the opportunities
for the efficient producers of sugar, then this principle ought
also to be applied to countries outside the EU as well as those
within it. There have been calls for the access to the EU sugar
market made open to the world's poorest countries to be put back,
so that the Everything But Arms process is reversed. These calls
should be rejected.
5. Secondly, if the EU aspires to persuade
its trading partners that they should adopt the same idea of rewarding
efficiency by opening up their domestic markets to imports in
fields where European exports might flourish, then it must be
willing to do the same itself. Otherwise it will not be credible.
Whether or not the EU has reached agreement on an efficiency-based
reform of its sugar regime will therefore have a substantial bearing
on the strength of its negotiating position in Hong Kong and on
the ability of the world trade talks to deliver the next stage
in prosperity, particularly for the world's poor.
WTO NEGOTIATIONS
6. There are also two points to make about
the WTO negotiations themselves.
7. First, the list of "sensitive"
products, subject to special protection, has not yet been finalised.
In the interests of trade opportunities for poorer countries,
it is essential that the EU does not designate sugar as sensitive
and thus block imports from them.
8. Secondly, there needs to be a coherent
approach to the treatment of raw materials and finished products
containing those raw materials. The tariff system should not discriminate
between the two, in the interests of fair competition and also
to create more opportunities for the suppliers of raw materials
also to start processing and move up the value chain.
CONCLUSION
9. Much therefore rides on the forthcoming
meetings in Brussels and Hong Kong. If they can be got right,
then a substantial step forward can be taken in the direction
of encouraging development and wider prosperity.
November 2005
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