Global Solutions Required for Global Problems

SAO PAULO -

The huge challenges facing the world economy demonstrate — if such demonstration was needed — that we live in a global economic system and there is no escape behind protectionist trade barriers. World leaders, acting together, have taken decisive steps to reduce the risk of catastrophic failure of the financial system. In recognition of the need for global action, the G-20, a far more globally representative group than the G-8, has assumed the mantle of global economic coordination.

Global Sugar Alliance members support the G-20 Leaders’ Pittsburgh commitment “to adopt a set of policies, regulations and reforms to meet the needs of the 21st century global economy,” and recognise that to achieve this outcome, two major global issues must be addressed:

1. The threat of climate change. Climate change is becoming a reality that cannot be addressed in any other way than by coordinated global action.

2. The Doha Round of trade negotiations. Almost a decade from its inception, the World Trade Organization (WTO)’s Doha round of negotiations, conceived to free up trade in agricultural products and enable faster development of the world’s poorest economies, still has not delivered an outcome.

The sugarcane industry has the potential to make a significant contribution to resolving both these issues, if governments will allow it to do so. Sugarcane is primarily a developing country crop. Free and fair trade in its two principal products, sugar and ethanol, can promote economic growth and development as well as help efficiently address the need for clean, renewable transport fuels.

Yet, domestic sugar and ethanol policies in many countries are failing the environment and consumers. Restricting the access to ethanol from environmentally friendly producers worldwide is slowing the response to climate change pressures. Trade distorting policies have been used in the richest countries to support high domestic prices, while preferential access arrangements for limited volumes are used to appease producers in the poorest countries. These policies result in disproportionate benefits for small, yet well-funded domestic lobby groups that maintain political pressure in support of their cause.

The United States government’s sugar program is an unfortunate example of a policy hijacked by these special interests. In a country of 300 million consumers, a small group of producers (roughly 6,500 beet growers and less than 1,000 cane farmers) control U.S. sugar policy. At a time when sugar policy in the European Union is slowly becoming less trade distorting, U.S. policy is becoming even more protectionist.

The Global Sugar Alliance remains concerned that WTO negotiations are still providing escape routes for so called “sensitive” and “special” products such as sugar. Smaller tariff reductions, limited quota expansions and other concessions will continue to provide loopholes for politically active producers in the richest economies to exploit, reducing the economic opportunity for others. At the same time, the richest countries are seeking market access concessions from the poorest.

Ministers commenced the Doha Round with strong ambition, seeking “comprehensive negotiations aimed at: substantial improvements in market access, reductions of, with a view to phasing out, all forms of export subsidies, and substantial reductions in trade-distorting domestic support.” (Doha Ministerial Declaration, November 2001).

The Doha Round must deliver real improvements in market access as well as cuts in subsidies and protection to ensure our farmers, the vast majority in developing countries, see genuine change in the world sugar market. All WTO Members have endorsed this commitment at the highest level. To achieve it, leadership is required. We urge WTO negotiators to meet the challenge.

Ultimately, decisions to open markets will be made at home. Individual countries and governments will be required to make difficult decisions in the face of domestic pressures to support industries. The U.S. and the G-20 must take the lead. Working at home, opening their economies to trade will build economic strength, support growth and break the Doha deadlock.

Global Sugar Alliance members are strong advocates for trade reform. We see the bigger picture and support our governments’ efforts for trade liberalisation. Our future depends on their success.

ABOUT US: The Global Alliance for Sugar Trade Reform and Liberalization brings together 85% of the world raw cane exports. The Global Sugar Alliance members (Australia, Brazil, Canada, Chile, Colombia, India, Guatemala, South Africa and Thailand) are active advocates to improve the world sugar trading environment. Members works closely together to ensure the fair and equal treatment of sugar and ethanol in the WTO negotiations on agriculture so that markets are allowed to work. For more information, visit www.globalsugaralliance.org

FOR MORE INFORMATION: Ian McMaster (Chairman), +61-419-476-980 Warren Males, +61-417-002-325

Source: The Global Alliance for Sugar Trade Reform and Liberalization

Ian McMaster, Chairman, +61-419-476-980, or Warren Males, +61-417-002-325, of The Global Alliance for Sugar Trade Reform and Liberalization