Thursday, September 27

The EU's sugar policy is also a total mess

I talked about the EU's fisheries policy being a mess, its regulatory impact analysis regime being totally unfit for purpose and now as it turns out, its sugar policy sucks. The FT reported:

Relations between the European Union and its former colonies soured further on Wednesday after Brussels was accused of “coercion” for planning to scrap a 30-year-old deal on sugar imports while talks continue on its replacement.

The European Commission said scrapping the measure by October 2009 was vital to ensure duty- and quota-free access for all 70-plus African, Caribbean and Pacific (ACP) countries when new EU trade rules came into effect.

The preferential access regime was ruled illegal by the World Trade Organisation, and a waiver granted in Geneva expires at the end of the year.

The EU is also struggling to remove 6m tonnes of domestic production by 2010, when the cut takes full effect, to bring European prices closer to world levels.

The road to hell is paved with good intentions, and this is what the pathetic EU subsidies have done to the 70 odd ACP countries (mostly African and Caribbean). It has made them dependent upon feeding on the public trough and left them indolent. Rest of the sugar producing countries managed to become more efficient and produce sugar with less effort and less cost. So now the situation is that the EU is struggling to reconcile its finances, its commitments to its previous colonies and its commitments to the WTO. I love it, couldn't have happened to a better organisation. Again, violate the laws of economics at your peril, you ignorant twits!

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