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ACP and Developing Countries: Common Sugar Regime

Volume 464: debated on Monday 8 October 2007

To ask the Secretary of State for International Development what recent representations his Department has received from African, Pacific and Caribbean countries on implementation of the reform of the Common Agricultural Sugar Policy. (154563)

DFID Ministers and officials have had a productive and ongoing dialogue with the African, Caribbean and Pacific (ACP) countries on the issue of European Union (EU) sugar reforms. This has included meetings and correspondence and has covered the depth and pace of the reforms, the amount and allocation of transitional assistance and the implications for sugar of the EU's duty and quota free market access offer under the Economic Partnership Agreements (EPA's).

Most recent communication between DFID and the ACP countries has been about the European Commission's proposal to terminate the sugar protocol (SP). A number of ACP countries have been concerned about the impacts of the ending of the protocol. However, it is a logical consequence of the EU internal sugar market reforms and the offer of duty and quota free market access as part of the EPAs.

We consider that the Commission's market access offer, on 4 April 2007 will provide, over time, real opportunities for ACP sugar exporters to expand exports to the EU.

To ask the Secretary of State for International Development what assessment his Department has made of the effect on sugar producers in developing countries of the implementation of the reform of the Common Agricultural Policy sugar regime. (154542)

In 2003 the European Commission undertook an impact assessment of the proposed reform of the European Union (EU) internal sugar market (this was formally adopted by the Agricultural Council in February 2006). In May 2006 DEFRA undertook a comprehensive regulatory impact assessment of the reform. This assessment looked at the potential impact of the reform on all stakeholders including African, Caribbean and Pacific (ACP) countries that supply sugar to the EU market under a preferential trade agreement. In addition DFID has commissioned a number of independent studies looking at the impacts of the reform on the sugar industry in developing countries, with particular emphasis on the least developed countries (LDC's).

The assessments and studies all suggest that the reform will present challenges for the ACP countries who will see the value of their preference decline. They also show that the reform will provide impetus for some of the ACP countries to move their economies away from large scale dependency on sugar and thereby provide long term economic benefit in the form of efficiency gains. However the assessment also suggests the ACP countries will need financial assistance to help them diversify their economies and adapt to the reforms.

In response to these assessments DFID successfully lobbied the Commission to provide transitional assistance for the ACP countries. As a result of the lobbying the EU has earmarked around €1.244 billion between 2007 and 2013. Allocation of these funds is based on a national Sugar Action Plan submitted independently by the ACP countries. DFID has provided technical and financial support to a number of ACP countries to draw up their individual plans.