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Caribbean RNM calls for respect for sugar protocol obligations

22 September 2004

The Caribbean regional negotiating machinery has sought to locate the preliminary ruling in the WTO to the internal EU process of sugar-sector reform in a paper in its update of August 19th 2004. The ruling will have important implications for six Caribbean economies (Barbados, Belize, Guyana, Jamaica, St Kitts and Nevis, and Trinidad and Tobago). Caribbean heads of government have estimated that annual income losses will be US$90 million by 2008, equivalent to 150% of the EU aid commitment to regional programmes in the Caribbean up to 2008. The paper argues that the preliminary WTO ruling strengthens the case for ‘near-term support from the EC to facilitate industry restructuring and diversification’. The article also argues for sugar protocol commitments to be fully respected regardless of the outcome of the WTO case.

Editorial comment

If effective EU assistance is to be extended to the restructuring of the Caribbean sugar sector before 2008, then past experience suggests that such assistance will need to be extended outside of the framework of EDF procedures. Quite simply the regional experience suggests that using EDF procedures even under the most favourable conditions it can take from three to four years before funds are released. This would not provide any time for the actual implementation of restructuring measures. One option to overcome the time delays would be to allow retroactive financing of specified restructuring measures under any sugar-specific restructuring programme.