The Sugar Lobby 2004-2006: A Case for more Innovative Diplomacy
| Author | Riyad Insanally |
| Pages | 308-331 |
THE SUGAR LOBBY 2004–2006:
A CASE FOR MORE INNOVATIVE DIPLOMACY
Riyad Insanally1
22
Introduction
On July 14, 2004, the European
Commission (EC) released its Communication
to the European Council and the European
Parliament on the proposed reform of the
European Union’s (EU’s) Sugar Regime, as
part of the drive to complete the reform of
the EU’s Common Agricultural Policy (CAP).
Whilst focusing on the heavily subsidised and
generally uncompetitive European beet sector,
the EC proposed to slash the guaranteed price
of cane sugar imported under the EU/Africa-
Caribbean-Pacific (ACP) Sugar Protocol2 by
37%, in two steps, over three years, beginning in
July 2005. There was no offer of compensation
for Caribbean Community (CARICOM) and
ACP sugar suppliers, but only vague promises
of “accompanying measures” to soften the
blow.
On June 22, 2005, the EC submitted
to the European Parliament a legislative
proposal for reform of the Common Market
Organisation (CMO) for sugar and a proposal
for an “Action Plan” on accompanying
measures for affected Sugar Protocol countries.
The new reform proposal called for the new
regime to take effect on July 1, 2006, with a
total price cut of 39% for raw sugar, phased in
over four years. The price for beet would also
be cut by 39%, but over two years from 2006,
instead of four (EC, 2005a); for Sugar Protocol
suppliers, the price cut was deeper than that
originally proposed by the EC, but there was
one year added to the phase-in period. Under
the proposed accompanying measures, still
rather vague in their conceptualisation and
elaboration, Sugar Protocol countries would
get €40m in 2006 to help them adapt to the
changes (EC, 2005b). On the other hand, to
offset the cut in the beet price, EU growers
would receive 60% compensation in the form
of direct, decoupled aid, with a compensation
fund of €6,000m for uncompetitive EU
producers and a buy-out scheme to help them
leave the sector (EC, 2005a).
On November 24, 2005, the UK
Presidency succeeded in brokering a political
agreement on sugar reform in the EU
Agriculture Council. The new regime would
enter into force on July 1, 2006, with the price
of raw sugar to be cut by a cumulative total of
36% in three steps, over four years, dropping
from €523.7 per tonne to €496.8 (-5.1%) in
2006/07 and 2007/08, €448.8 (-14.3%) in
2008/09, and €335.2 (-36%) by 2009/10.
This was down only 3% from the EC’s original
proposal, but was attenuated slightly by the
one-year delay in its implementation and the
somewhat less severe reduction in the first two
years of the new regime (EC, 2005c).
The EU also came to an agreement on
November 30, 2005, on all the elements of
its 2006 budget, including the €40m for
accompanying measures. The Parliament
adopted the 2006 budget on December 15,
2005, and on May 4, 2006, the EC announced
that there was a basis for political agreement
within the EU on the overall sum that would
be proposed for Sugar Protocol countries in
the EU’s Financial Perspectives for 2007-13.
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The Sugar Lobby 2004-2006: A Case for more Innovative Diplomacy 309
This two-year timeline for reform – which
also encompassed World Trade Organisation
(WTO) negotiations on the Doha
Development Agenda (DDA) and efforts to do
away with agricultural subsidies in developed
countries; the specific case in the WTO
brought by Australia, Brazil and Thailand
against the EU Sugar Regime and its system of
market-distorting domestic subsidies and the
EU’s subsequent appeal against the Dispute
Settlement Body’s ruling; and the lead-up to the
post-Cotonou world of Economic Partnership
Agreements (EPAs) - witnessed intense activity
on the part of CARICOM Sugar Protocol
members, working in concert with their ACP
partners, to lobby against the timing and scope
of the proposed changes to the Sugar Regime,
in order to maintain access to the EU sugar
market at a reasonably remunerative price and
to secure adequate transitional support from
the EU.
A strong alliance was forged among
affected industries and governments in the
region, working through the Sugar Association
of the Caribbean (SAC) and the CARICOM
Secretariat. In Europe, a robust ACP-wide
response was developed, under the aegis of
the ACP Ministerial Consultations on Sugar
and the Sugar Consultative Group (SCG) of
Ambassadors in Brussels, with technical support
from the ACP London Sugar Group (LSG)
of Commercial Representatives, all of which
included major inputs from the representatives
of CARICOM sugar producing countries. The
two-year period thus provides an opportunity
for a case study of a specific theatre of
diplomatic activity and a process of engagement
to protect vital commercial interests, in which
conventional diplomacy morphed into more
innovative public diplomacy and lobbying,
beyond the framework of traditional bilateral
and multilateral diplomatic engagement.
Indeed, the mult-faceted approach taken
by CARICOM and the ACP bears a close
resemblance to what Jorge Heine describes as
the “new diplomacy”, in which the traditional
“club model” of diplomacy, involving mainly
government officials and the occasional
business person, with the focus generally
on the negotiation of agreements between
sovereign states, gives way to a new “network
model” of diplomacy, in which “diplomats
engage a vastly larger number of players in the
host country” – or countries as in the case of
the sugar lobby – to tell their story to a wider
public (Heine 2006).3
Even though the region has moved on since
the entry into force of the new EU Sugar Regime
and with the signing of the EU/CARIFORUM
EPA, this chapter will examine how regional
stakeholders joined forces with their ACP
counterparts and with other stakeholders in
Europe to safeguard their interests, and will
consider how the deployment of political,
diplomatic, industrial and civil society assets in
campaigning for a fair deal under the ne w EU
Sugar Regime, including alliances with NGOs,
media outreach and attempts to mobilise the
Diaspora, fits in with the “network model”
of “new diplomacy”. Finally, an attempt will
be made to determine how effective these
efforts were and identify lessons learned for
future international engagement on the part
of CARICOM. In this respect, the chapter
will analyse not so much the positions taken,
since CARICOM and the ACP were never
involved in a negotiation proper, but the
implementation of the lobbying strategy as it
evolved.
The CARICOM Response
Recognising that, if the EC’s leaked
proposals were allowed to go forward
unopposed, CARICOM sugar producers
stood to lose an estimated US$180 million in
the first three years of the new regime, with
a recurring loss of US$90 million annually
thereafter, CARICOM Heads made their
displeasure clear at their meeting in Grenada,
on July 4–7, 2004 (CARICOM, 2004a).4
Firm action was now required to back up
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