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US, EU AND JAPANESE SUGAR POLICIES MUST CHANGE
Published: 30/11/1999
Source: Seattle Proceedings
Origin: Australia
Abstract: Sugar trade liberalisation is long overdue and there is no reasonable case for maintaining the current protectionist policies of the world?s three richest economies of the EU, US and Japan, according to the Australian delegation attending the World Trade Organisation?s (WTO) Ministerial Conference in Seattle.
Full Article:
Sugar trade liberalisation is long overdue and there is no reasonable case for maintaining the current protectionist policies of the world’s three richest economies of the EU, US and Japan, according to the Australian delegation attending the World Trade Organisation’s (WTO) Ministerial Conference in Seattle.
In its most determined effort yet, Australia’s delegation – armed with a comprehensive global study of the effects of the current sugar regimes and the likely impacts of change – will urge a start to a process which is hoped will result in fundamental and major sugar market reform.
“World raw sugar prices could increase by up to 41 percent if current protectionist policies in key countries including the US, EU and Japan ceased, giving a major boost to the global sugar market and therefore benefit to Australia,” leader of the Australian sugar industry delegation Mr Bruce Vaughan said today.
Mr Bruce Vaughan – who is also Chairman of the Queensland Sugar Corporation – says he believes there is an undisputed case for reform of a system which can only be described as grossly unfair to the world’s efficient sugar producing countries.
“Whatever reasons may have once existed for protectionist policies in the EU, US and Japan, there can be no reasonable rationale for their maintenance in today’s world. These policies are past their “use-by” date.”
Mr Vaughan said the Study, undertaken jointly by the highly respected Australian Bureau of Agricultural and Resource Economics (ABARE) and Sparks Companies, Inc of the US, highlighted in stark detail the oppressive results of intervention in major sugar exporting and importing countries.
“In summary, the Study shows that EU, US and Japanese policies have:
- reduced global sugar consumption
- reduced world sugar prices
- caused sugar producer incomes in real terms to decline
- the high prices caused by interventionist policies reduce the attractiveness of sugar relative to other sweeteners thus encouraging food and beverage manufacturers to look to substitutes for sugar
- consumers in the EU, US and Japan all pay much higher prices for sugar and sugar containing foods than they would in a less distorted world sugar market.
“The ABARE/Sparks study points to the true costs to both sugar producers and consumers. It strips away the flimsy veneer which is used to ‘sell’ outdated policies which are counter-productive to the well-being of the world’s sugar markets,” Mr Vaughan said.
The Study shows that in the US the net welfare costs of its sugar system are nearly $US1 billion annually, while its administration adds another $US400 million a year in unnecessary costs to US sugar consumers.
In the EU reduced policy intervention in the local market would result in significant gains to the economies of the EU members states and to sugar exporters. The price paid to producers for domestic sugar supply is currently three to four times the world market price.
In Japan removing various import charges in sugar would lift world raw sugar prices and at the same time elimination of sugar import barriers would result in major gains to both the Japanese economy and to world sugar exporters.
Mr Vaughan said that Australia understood the political issues in each of these major markets.
“Nevertheless, it is time for the US, particularly, to show strong leadership as it does in so many other ways, and support changes to free up world sugar trade.
“The US is calling for increased market access for agricultural commodities and should reciprocate by opening its own market to sugar imports.
“These days it is folly to protect an inefficient grower through a system which ultimately results in existing and potential sugar users looking for substitutes in order to reduce costs, when it is possible to provide the world’s high quality sugar at attractive prices.”
Mr Vaughan said this was the paradox. Eliminating the distorting factors imposed by the US, EU and Japan would not only raise world sugar prices and reward efficient producers around the world, including Australia, but it would also bring domestic sugar prices down in those three regions and so reward their sugar using industries and consumers.
“We believe the WTO’s Ministerial Conference in Seattle will give serious consideration to these issues.
A copy of the Sugar Study is available from the following website: dfat.gov.au
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