Tue | Dec 12, 2017

David Jessop | Rethinking the relationship with Europe beyond sugar

Published:Sunday | October 1, 2017 | 12:00 AM
A cane harvester reaps sugar cane on the Monymusk Estate in Lionel Town, Clarendon.
In this 2009 file photo, burnt cane is harvested and transported to the Frome Sugar Factory.
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Today, October 1, the European Union's sugar regime, which has for decades sustained the production of cane and raw sugar in the Caribbean, comes to an end.

This is scarcely news. As a long-planned domestic measure, the EU decided in 2013 to abolish national sugar production quotas in Europe in 2017. The measure will cause the overall volume of EU sugar imports to fall as Europe becomes self-sufficient, and reduce the price paid for cane sugar from the African, Caribbean and Pacific or ACP group.

Over time, the measure is expected to see the EU sugar price decline towards the already low world market price, forcing the EU sugar sector to become more competitive, removing any incentive for high-cost cane producers such as those in the Caribbean to export raw sugar post Brexit to the EU27.

In response, some industries, most notably in Belize, have developed strategies aimed at ensuring international competitiveness and sustainability. They are doing so through mechanical harvesting, sugar refining and the production of food grade sugar for export, through what is known as direct consumption sugar. In contrast, the rest of the industry in the Caribbean has been slow to react to what is now fact.

Earlier this year a sugar industry workshop in Jamaica considered the implications. It produced a clear set of recommendations as to how the industry in the region might respond. In part, the meeting proposed the consolidation of Caricom's internal sugar market by all governments enforcing the existing 40 per cent Common External Tariff on all imported non-CSME raw and refined sugars and high fructose products. Where this proposal has reached is unclear.

 

Sugar's difficulties

 

Unfortunately, sugar's difficulties stand as a metaphor for the region's failure to respond more generally in a timely manner to radical external policy challenges. It highlights, too, the need for the region to rethink its relations with the EU27 post-Brexit.

These thoughts were implicit in the remarks made a few days ago by Daniela Tramacere, the EU's ambassador to Barbados, the OECS and Caricom. Speaking to the Barbados Chamber of Commerce, she said that while Europe heard the region's multiple concerns, looking ahead, new modalities would be needed if Europe is to engage and cooperate with middle income countries, taking fully into account their vulnerabilities.

In remarks focused on a new post-Cotonou framework agreement for the regions of the ACP, she suggested that what is now required are mechanisms for a closer dialogue, and a more comprehensive approach to implementation. She also suggested linking traditional development aid with other resources to create more innovative forms of financing in ways that leverage private sector investment and domestic resources.

She spoke, too, about Europe's belief that any new arrangements must, in some structural way, include civil society and the private-sector.

The ambassador did not say so, but as this column has previously observed, when it comes to a successor agreement to present ACP-EU arrangements, many of Europe's member states also see greater future relevance in an approach that places emphasis on geographic coherence, the involvement of new regional partners, and consistency with the EU's broader external relations and development policy.

Although whatever follows Cotonou will have to be determined through dialogue, to complicate matters the Caribbean can no longer expect to have the support of or influence from the United Kingdom in the design of a new agreement.

Recent statements make it apparent that as of 2019, Britain, as a part of its post-Brexit policy, will cease to pay into the European Development Fund, thus curtailing London's ability to influence the direction of the post-Cotonou negotiations and future EU development policy.

Following the third round of negotiations with British ministers and officials, the EU's chief negotiator on Brexit, Michel Barnier, in comments not widely reported, said: "We jointly support development in Africa, the Caribbean and Pacific countries through the European Development Fund, the EDF. After this week, it is clear that the UK does not feel legally obliged to honour these obligations after departure."

At its most obvious, this means that when EDF11 ends in 2020, a successor agreement will need either to replace the 14.7 per cent contribution the UK makes to the EDF's euro30.5 billion (US$36 billion) multiyear budget, or accept a spending reduction, and possibly budgetisation, in any successor arrangement.

More important for the Caribbean, however, when the UK absents itself, is that under the EU's weighted voting system, influence in the EDF Committee will flow to Germany, France, Italy and Spain, as well as to nations like Poland that have no historic relationship with the region.

 

Post-Brexit assurance

 

British ministers in private have previously assured their Caribbean counterparts in both the independent part of the region and the overseas territories that they will not be any worse off post-Brexit. However, what is less clear is the nature of such support.

Read carefully a recently produced British Government policy paper on Foreign Policy, Defence and Development Policy on future partnerships with the EU27 post Brexit, and it becomes clear that the way in which the UK prioritises its bilateral support may change.

Although not spelt out in detail, the document appears to suggest that London's future emphasis will be on a cross-cutting global approach built around security, its strategic concerns, and a focus on the UN Sustainable Development Goals.

Later this month, in San Salvador, there will be the opportunity for the Caribbean to hold a political dialogue with Europe at the EU-CELAC Summit. However, more is needed. If the EU27 are to develop policies that respond to the region's long-term concerns, more frequent bilateral exchanges at all levels are required with those EU states that will in future have the greatest influence over development policy.

Political change in Europe, and the EU27's commitment to continuing engagement with the Caribbean post-Brexit, require the region to be much clearer about what it wants.

- David Jessop is a consultant to the Caribbean Council. david.jessop@caribbean-council.org