2205 final report.pdf - Agra CEAS Consulting

IMPACT OF THE EU SUGAR REGIME ON BCCCA MEMBER COMPANIES
The CMO provides additional aids to the sugar industry namely refining aid which is granted to
the refining industry and covers certain costs of raw sugar, and production refunds granted for
sugar used by the pharmaceutical and chemical industries, allowing them to buy sugar at world
market prices to which shipping costs are added.
• Trade regime. In terms of the management of external trade, the current CMO provides two
instruments, namely border protection and export refunds 4 . Border protection is in the form of a
combination of two duties, one fixed and another resulting from the application of the special
safeguard clause justified by the volatility of the world market price for sugar. Protection for
sugar (CN 1701) comprises a fixed duty of €419 per tonne, except in the case of raw sugar for
refining to which a duty of only €339 per tonne applies. On average the additional duty was €115
per tonne in 2003 (€87 per tonne in 2002).
Export refunds are intended to cover the difference between the EU price and the world price for
sugar, allowing it to be sold on the world market. The average export price for white EU sugar
was €280 per tonne for the 2001/2002 marketing year and €223 per tonne for 2002/03. Refunds
are paid for sugar obtained from beet or cane harvested in the EU and sugar imported under the
ACP Protocol/Agreement with India 5 . For the marketing year 2001/02 refunds were €443 per
tonne and for 2002/03 €485 per tonne.
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In preparation for EU enlargement, a number of ‘double zero’ agreements were established between the EU and accession countries
aimed at further liberalising trade on agricultural products and providing for reciprocal elimination of export refunds and the elimination of
import tariffs
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The ACP Protocol/Agreement with India establishes close links with a number of sugar-producing ACP States and India. This peculiarity
originated in the Commonwealth Agreements governing the import of raw cane sugar into the UK for refining and marketing. This sugar
covered two thirds of UK consumption. The Agreements were taken over by the European Community and adjusted to suit its needs
when the UK first joined the EEC. The Protocol on sugar attached to the 1975 Lomé Agreement between the ACP countries and the
Community sets out a commitment from both parties, a commitment by the Community to buy certain quantities of sugar at guaranteed
prices and a commitment by the 16 ACP signatory countries to supply that sugar. Under the Protocol on sugar, the signatory ACP
countries benefit from a total exemption from import duties on sugar, whether cane, raw or white. Sugar is marketed in the Community
at a price freely negotiated between buyers and sellers but the Community undertakes to buy at a guaranteed price any sugar that cannot
be marketed at a price equal to or higher than the guaranteed price. An identical agreement was concluded at the same time with India.
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