St. Kitts and Nevis' Prime Minister and Head of the CARICOM Mission, Hon. Dr. Denzil L. Douglas; Member of the European Parliament, Mrs.Glennys Kinnock; Guyana's Minister of International Trade, Hon. Clement Rohee; St.

Douglas was concluding a tour of European capitals this weekend seeking an increase in compensation for sugar producing nations affected by a EU decision to unilaterally and significantly cut the price for sugar exported.

CARICOM Heads of Government agreed to mount the mission to meet with counterparts in select European capitals and representatives of European Union institutions, to outline strongly CARICOM's concerns with respect to EU proposed measures, in advance of the decision to be taken by the EU on the quantum of resources to be made available as compensation for the 2007 to 2013 period. 

In keeping with that Heads decision, the mission headed by Prime Minister Douglas was tasked to highlight CARICOM's position that the quantum of resources in the accompanying measures being made available in light of the EU's changing Sugar regime must be adequate.

Accompanying Prime Minister Douglas on the mission are: CARICOM Ministerial Sugar Spokesperson Hon. Clement Rohee of Guyana; St. Kitts & Nevis' Minister of Foreign Affairs and International Trade, Dr. the Hon. Timothy Harris; Representative of the CARICOM Secretary-General, Dr. Kusha Haraksingh; and, CARICOM diplomatic and private sector sugar representatives.

In reference to the CARICOM lobbying mission, Prime Minister Douglas noted, "we are here to highlight the seriousness of our situation.  Our concerns go beyond simple economics.  We need urgent assistance to avoid huge social upheaval in our countries.  We urge EU leaders not to leave small developing countries to shoulder a disproportionate burden of the EU sugar reform."

The mission conveyed the message that the EU Sugar measures will have permanent adverse repercussions not only for the sugar industry, but for CARICOM as a whole.  At stake is the level of compensation to be granted under the EU budget 2007 to 2013 to the eighteen ACP countries who export fixed quantities of sugar to the European market at preferential rates under the terms of the ACP-EU Sugar Protocol.

These countries will lose over Euro 250 million per year in stable earnings, as a result of the thirty-six percent price cut agreed by EU Agriculture Ministers in November 2005.  Guyana, the poorest ACP country in South America where sugar exports account for almost twenty percent of GDP, stands to lose Euro 40 million a year as a result of the reform.  Other countries in CARICOM that will be severely affected are Barbados, Belize, Jamaica and Trinidad & Tobago.

In anticipation of EU sugar reform, St. Kitts & Nevis has already taken the difficult decision in 2005 to close its sugar industry after more than 360 years of production.  This decision saw national unemployment rise from five percent to fourteen percent overnight, with the loss of the only agriculture export commodity.

CARICOM is particularly concerned that a decision by the Tripartite Institutions (the European Commission, European Parliament and Council) to be taken in the coming weeks as regards the financial package to be made available for the period 2007 to 2013 be reflective of its resource needs. Resources must be front-loaded, adequate and easily accessible, as by 2009 CARICOM sugar supplying states will feel the full impact of the EU's Sugar regime reform.

Speaking to the Regional Negotiating Machinery (RNM), Prime Minister Douglas said "it has become necessary for us to indicate very clearly and loudly to the Europeans that adequate resources be made available to enable the transformation of respective sugar sectors, and in this respect for the period 2007 to 2013 we are of the view that Euro 250 million be made available each year to ACP sugar suppliers."

Euro 40 million has already been earmarked by the EU for ACP sugar-suppliers for 2006.  As has been widely acknowledged in CARICOM and the ACP at large, this level of assistance is woefully inadequate, and pales in comparison to the compensation package of Euro 7.9 billion that has already been agreed for European sugar beet farmers and processors.    

In a meeting with the United Kingdom Parliamentary Under-Secretary of State for International Development Hon. Gareth Thomas on Monday, Prime Minister Douglas" delegation impressed on the Under-Secretary that the Euro 250 million figure was arrived at by an Oxford University study, and that this level of resource allocation was critical to the success of ACP sugar supplying countries" transformation and diversification efforts.

As with other ACP sugar supplying states, those of CARICOM have worked on proposals for action plans that outline how these countries intend to diversify their sugar sectors and make respective sectors more competitive; important in this effort are resources to enable that reform.

According to Prime Minister Douglas, St. Kitts & Nevis has a debt to GDP ratio of 177% - amongst the highest in the world.  He contended further that other CARICOM countries had high debt to GDP situations that would worsen in an environment where inadequate resources were forthcoming for pending transformation efforts in respect of the sugar sector.  "In addition to being a heavily indebted Region, without adequate help for our sugar sector the Caribbean's poverty situation would worsen," Dr. Douglas warned. 

According to the Prime Minister, in addition to facilitating transformation and diversification, the provision of adequate resources would enable the Region to cushion the socio-economic effects that will be brought on by changes to the EU Sugar regime. 

This message was also relayed in a meeting Tuesday morning with Austrian Federal Chancellor Wolfgang Schussel. Austria currently has the Presidency of the Council of the European Union.  The Federal Chancellor was empathetic to the predicament Caribbean sugar supplying countries find themselves in. Describing the meeting as a fruitful encounter, Prime Minister Douglas said "the Federal Chancellor was receptive to our positions, encouraging the Caribbean to reach out to other stakeholders too to make our case." 

In a Tuesday afternoon meeting with European Commission President Jose Manuel Barroso who was flanked by Commissioners - including Trade Commissioner Peter Mandelson, Prime Minister Douglas' team remained on message, leaving the meeting relatively pleased that their positions resonated with Commission officials. 

The Caribbean delegation was therefore surprised and shocked to learn this morning (March 8) that the Commission had recommended to the EU Parliament that in 2007 Euro 130 million be made available to ACP sugar suppliers at large, with progressively increasing amounts through 2008 and 2009 - leveling off at Euro 170 million per annum as a ceiling between 2010 and 2013. 

"In effect, this approach back-loads funding," Prime Minister Douglas told RNM UPDATE, expressing regret with the proposed level of resources to be made available. 

"We are saddened that the Commission has not given us the kind of support we expected," Douglas lamented.

Austria's successor for the Presidency of the Council of the European Union is Finland.  Prime Minister Douglas' team was in Helsinki on March 8, where the team met with the Prime Minister of Finland Matti Vanhanen.

En route to Helsinki, Prime Minister Douglas told RNM UPDATE that the next week to three weeks represent a critically important "window of opportunity"

to influence a process that will "solidify" the figures as regards resources to be made available from 2007 through to 2013.

He called on colleague CARICOM Prime Ministers to mount similar trips to Europe, "to influence the process."  He said, in the interim, it is up to CARICOM's envoys in Europe to continue on with lobbying efforts.

The Caribbean delegation also met with Secretary-General of the ACP Group of States, Sir John Kaputin.  Sir John expressed solidarity with CARICOM's efforts at this critical time, noting that ACP sugar suppliers need to be fairly compensated for impending losses.

Prime Minister Douglas' team held a Press conference on Wednesday, moderated by Member of the European Parliament and Co-President of the Joint ACP-EU Parliamentary Assembly, Ms. Glennys Kinnock.

Prime Minister Douglas expressed his deep disappointment over the unilateral nature of the Commission's decision regarding Sugar reform and about the inadequate quantum of the Financial Assistance proposed. 

What is now on the table for the entire ACP is Euro 130 million in 2007, rising to Euro 170 million per annum between 2010 and 2013, as against the Euro 250 million required.  The concern is that with funding being back-loaded, many of the countries which urgently need the funds to help their economies adjust to the reform might no longer have a sugar industry worth saving, because of the lack of adequate assistance in the early stages. 

Prime Minister Douglas called on the European Commission to revisit its position on Accompanying Measures, since without adequate compensation the reform would cause economic and social dislocation as well as political unrest.  For his part, Minister Rohee gave an overview of the ACP situation where, because of the drastic price cut, the ACP countries stand to loose a whopping Euro 17.5 billion over the seven year period, 2007 to 2013 and Guyana would lose Euro 40 million annually. 

He also totally rejected the EC's claim that ACP countries lacked the capacity to absorb a higher level of financial assistance, adding that resources should not be taken from EDF funding. 

During the Press Conference, Minister Rohee of Guyana gave an overview of the ACP situation where, because of the drastic price cut, the ACP countries stand to loose a whopping ¬17.5 billion over the 7 year period, 2007-2013 and Guyana would lose ¬40 million annually. 

He also rejected the EC's claim that the ACP countries lacked the capacity to absorb a higher level of financial assistance and added that resources should not be taken from the EDF funding. 

Minister Harris' contribution focused on the historical and moral obligation of the EC to the ACP countries, underscoring the fact that for centuries Europe had benefited from the relationship with the ACP countries and now it was the EC's turn to offer appropriate and adequate assistance to the ACP countries.

Ambassador Derek Heaven of Jamaica, called for the European Commission to bring about equity in the case of the ACP States since the Sugar Protocol was a solemn treaty with obligations on both sides.  Jamaica, for example, would lose some ¬24 million a year therefore the assistance now offered was woefully inadequate.  Ambassador Heaven acknowledged the sympathetic position of the European Parliament and called on the Parliament to be more proactive and to encourage the EU to assist the ACP Sugar Protocol States achieve their Millennium Development Goals.