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October 17, 2000 - International Trade News

Global Alliance for Sugar Trade Reform Meeting

On October 9, 2000, representatives from major sugar producing countries gathered in Banff to deliver an urgent message to the Cairns Group Ministers. The Global Alliance for Sugar Trade Reform and Liberalization is calling for the negotiation of a WTO agriculture agreement that will reform international sugar policies. They have identified the policies of the US, EU and Japan as the main source of distortions in the global sugar market which cause depressed world prices and lower incomes for sugar producers, many of whom live in developing nations. Members of the Global Sugar Alliance include, Australia, Brazil, Canada, Chile, Columbia, El Salvador, Guatemala, Honduras, India, Nicaragua, Panama, Thailand and South Africa which joined in Banff. Cairns Group Ministers recognize that, "further trade liberalization must take account of the particular needs of developing countries and support their economic development." The Global Sugar Alliance provided a practical example of where action could begin.

Call to Action

The Global Alliance delivered a "Call for Action" to the Chairman of the Cairns Group, Trade Minister Mark Vaile of Australia at an official dinner on October 9, 2000. The dinner was attended by industry leaders, Ministers and WTO Ambassadors from several sugar producing countries including Sergio Marchi, Canada's Ambassador to the WTO. Jean Augustine, MP was there in her capacity as chair of the National Sugar Caucus and the Hon. Shirley McLellan, Alberta Minister of International and Intergovernmental Relations, also attended.

The Call for Action noted that it is important that the negotiations focus on the fundamental benefits of liberalization for developing countries rather than solely on the concessions the major developed countries are prepared to make. The "Action" being called for by the Global Alliance members includes:

Elimination of Export Subsidies
Export subsidies are among the most distortionary of trade policies impinging on the world sugar market. Export subsidies both reduce world sugar prices and distort competition for access to markets for all exporting countries. Fundamental reform is required to eliminate these subsidies.

Elimination of Trade Distorting Domestic Support
Government intervention in many developed countries, such as the US, EU and Japan, distorts market signals by the differential application of domestic price supports. The Global Alliance is calling for the elimination of all trade distorting domestic support.

Significantly Improved Market Access
Improved market access is a central objective of the Global Alliance. To maximize effective market access opportunities for all countries to all markets, the Global Alliance is calling for the progressive elimination of all tariffs including in-quota and over quota tariffs.

According to the Global Alliance, "There are compelling reasons for the reform of agricultural policies and the full inclusion of disciplines on sugar in those changes. In too many countries, the production and marketing decisions of sugar producers respond to support programs rather than natural market conditions. The consequence is that the world's most efficient exporters, the majority of whom are developing countries, face competition from subsidized sugar exports and suffer a lack of access to markets."

The Global Alliance for Sugar Trade Reform and Liberalization first met in Seattle at the 1999 WTO Ministerial to urge Ministers to reform sugar policies, which largely escaped discipline in the last round of the WTO. Sugar policies, notably in the US, EU and Japan, support domestic sugar at two to three times the world price. To maintain the high internal prices, these countries restrict imports limiting export opportunities for countries in the Global Alliance. The price supports also lead to increased production and lower consumption in developed country markets creating structural surpluses that must be disposed of on the world market. Those dumped or subsidized surpluses depress world prices, further hurting producers who export at this price.