Geneva, Dec 10 - A trade row over sugar is building as tropical producers directly contradict claims by the European Union about the state of negotiations on the product.
EU Agriculture Commissioner Mariann Fischer Boel told sugar growers in France, the European Union's biggest producer, on Tuesday that sugar issues had been settled to the EU's advantage in negotiations at the World Trade Organisation (WTO).
But Costa Rica's WTO ambassador, Ronald Saborio Soto, said an agreement on the status of sugar and other products had been abandoned after the EU walked away from a deal on bananas when a WTO meeting of ministers on the Doha global trade round collapsed in July. "The question is completely open," Saborio, who coordinates tropical products countries at the WTO, told Reuters.
WTO Director-General Pascal Lamy is considering whether to call ministers to Geneva later this month to have another attempt at a breakthrough on the Doha round, which could help cushion the impact of a global economic slowdown.
In preparation for the possible meeting, the chairmen of WTO talks on agriculture and industrial goods issued new negotiating texts on Saturday to serve as blueprints for ministers.
CONTRADICTIONS AND BANANAS
But the farm proposals contain a contradiction which cannot be resolved until a decades-old dispute over bananas is settled.
One proposal would see tariffs on tropical products from Latin American growers come down faster and more steeply than the general cuts on agricultural goods.
But another would allow rich countries to reduce tariffs more slowly on products from poor developing countries who currently enjoy preferential access to their markets.
This is to give the developing countries, represented by the African, Caribbean and Pacific (ACP) group of mainly former European colonies, more time to adjust to the loss of their relative advantage as markets open up with lower duties.
Clearly, many products could be on both lists, and a Doha deal will only be possible if there is agreement on the overlaps, otherwise either the Latin Americans or ACP countries could block a deal under the WTO's consensus-driven system.
"As I prepare to go to Geneva in a few days, what we have on the table in the Doha Round with regard to sugar is very encouraging," Fischer Boel said.
"Sugar will not be considered a 'tropical product'. Sugar will be on the list of products which will be affected by preference erosion," she told the French sugar beet growers' association CGB, according to a text of her remarks.
Sugar's presence on the preference erosion list means EU sugar tariffs will be cut over 8 years after a 2-year grace period, instead of being cut over 5 years, she noted.
But her comments seemed to be based on a compromise in July, when the Latin Americans grudgingly dropped sugar, rum, tobacco and other products from their list in return for an EU agreement to treat their bananas the same as fruit from ACP countries.
Bananas are crucial to the economy of many Latin American countries, such as Ecuador, the world's biggest grower.
"There is no agreement on any of the 42 products on which Tropical Products countries or ACP countries have differences," Saborio said.
"The fact that the EU decided not to comply with the standalone agreement on bananas brought the whole negotiation back to square one," he said.
EU officials have made it clear that if a Doha meeting goes ahead they are willing to revive July's agreement on bananas for the sake of an overall deal -- but with some adjustments.
One is that they cannot implement tariff cuts on bananas from Jan. 1 next year, which has infuriated the Latin American growers who say they will lose millions of dollars as a result.
Fischer Boel also revealed in her speech that the EU could let in a quota of 485,000-675,000 tonnes of sugar a year at low tariffs under WTO rules, if it decides to designate sugar as a sensitive product to shield it overall from full tariff cuts.