For years we in
OCT-EU Preferential Sugar Trade: With regard to the end of the processed sugar exports from
What did happen, however, was the following. A complaint against the EU was filed in the arbitration tribunal of the World Trade Organization (WTO) by
Two years ago the WTO's arbitration tribunal ruled in favor of the parties that filed the original complaint (Brazil et al) and the EU was given a period of two years to dismantle its long standing subsidized sugar market regime. The OCT sugar processing trade had since its inception been an "arbitrage" game.
OCT based companies such as Anguilla Capital Corporation in Anguilla and others in Aruba and Curacao, sourced sugar at a low price in the global market and then shipped it to an OCT in order to subsequently ship to the EU (after nominal processing -- 'grinding, milling etc') and still make a decent return on their capital employed.
In accordance with the WTO's ruling the first thing that the EU did in order to dismantle its long standing subsidized sugar regime was forcibly lower their internal market prices. This, of course, created an "uneconomic" scenario for most, if not all, of the OCT based sugar processing export firms. In addition, another long standing agreement with the so called ACP group of countries involving raw sugar (not white refined as in our case) was also not renewed.
Mind you that of all the ACP countries that shipped raw sugar to the EU under a yearly quota, few if any had any natural competitive advantages in producing this sugar quota. For instance, you know St. Kitts better than me, and the mere fact that the island would have to import manpower from
So, in short, the EU did not "stop" the OCT-EU processed sugar export trade at all. Rather, under irrevocable orders from the WTO the EU's internal sugar market prices were cut by almost 50% in less than eighteen months which in effect rendered the entire trade "uneconomical" in all of the OCT's. And, to add insult to injury, for the past thirty years world sugar prices (i.e., our 'raw material price') had been at historical lows (at times as low as US$ 175.-- per metric ton of white refined sugar). However, due to the fact that global energy prices increased by as much as they did over the past 24-30 months the viability of cane derived ethanol all of a sudden increased world market sugar prices by more than 200% which, in effect, was the last nail in the coffin that ended this trade in "all of the EU's OCT's."