Call for access to sugar in EU-Mercosur free trade agreement

The European Sugar Refineries Association (ESRA) and the Committee of European Sugar Users (CIUS), have called for EU negotiators to give access to sugar in the EU-Mercosur FTA talks.

Ongoing negotiations with Mercosur could well lead to the most valuable free trade deal the EU has ever negotiated, they say, showing that Europe’s rhetoric on free trade is backed up by concrete results.

Representatives of EU cane sugar refiners and EU sugar users ESRA and CIUS are pushing for EU access to sugar to be included in these trade deals, in line with the overall spirit of the negotiations, which foresee significant increases in market access for both partners.

Europe benefits from the positive trade balance and growing exports of sugar containing products such as chocolate, confectionery and fine bakery wares, which carry a high EU added value.

“However, their future success depends on a reliable, competitive and sustainable supply of sugar,” ESRA and CIUS say. “Under the current circumstances, all of these aspects of the sugar supply chain are under threat.

“Security of EU sugar supply chains has long been assured through a combination of EU domestic production and imports from third countries. However, especially since the removal of EU sugar production quotas, currently available modes of access to cane sugar leave the EU cane refining sector under-supplied, and almost incapable of operating profitably.”

Under the current framework, EU cane refining will soon cease to exist as an industry, both associations argue. This, they add, is bad news for Europe as it would see the EU reliant on just one crop for sugar production. Imports of sugar are vital to ensure the reliability of sugar supply to the European market, and has been necessary multiple times during the last decade.

“Access to imports should always be available when needed, as the ad hoc opening of TRQs has not always occurred in a timely fashion in the past, meaning that just-in-time access to sugar was not always possible for EU industry,” the ESRA and CIUS note.

In addition, the geographic concentration of the EU sugar production sector would also be magnified. While sugar users – particularly the food and drink industries – are spread across Europe, beet production and cane refining are mostly located in different European regions. This complementary mix of locations offers great benefits to sugar users in terms of proximity, the associations add.

“Thirdly, 7 companies currently control 80% of EU sugar production. Losing the cane refining sector would only increase unhealthy regional concentrations. It is essential that the EU takes action to ensure a correct level of competition in our sector,” they say.

Any access granted for sugar in these deals should be through a tariff-rate quota (TRQ), they argue, where volumes are pre-defined and strictly controlled both for raw and white sugar. This, they add, should dispel once and for all the myth that Europe could become “flooded” with cheap, third country sugar.

If the EU wants to become the global standard-setter in free trade, it cannot approach negotiations with partners such as Mercosur from a position that can be perceived to be protectionist, according to the two groups.

“Offensive and defensive interests must of course be balanced, but we cannot allow one sector to hold back the drive towards modern agreements that produce meaningful free trade.”

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