A chance for sugar in the EU-Australia FTA: don’t let trade turn sour
Commission President Ursula von der Leyen has committed to “a strong, open and fair trade agenda” as a means of strengthening Europe’s role as a global leader and standard setter. Negotiators got together for the 6th negotiating round of the EU-Australia Free Trade Agreement (FTA) in February in Canberra. Striking a balanced and ambitious deal for raw sugar in this agreement would grant the EU a timely opportunity to lead by example and stand up for fair and rules-based trade.
ESRA is the voice of European cane sugar refineries in Brussels. Established in 2011, we represent full-time cane sugar refineries in the Europe, with members across four countries. Thanks to their use of a different raw material for producing sugar, our cane refiners provide European consumers with choice, competition, food security and a link to global markets.
Australia is a formidable trade partner for EU agri-food products, including sugar. It is both a competitive supplier of raw sugar for EU refiners and a potential export market for the EU’s white sugar.
Securing EU refineries a duty-free quota to the world’s third biggest raw sugar exporter would ensure the sector’s survival without threatening the stability of domestic producers - the TRQ mechanism will always limit the volumes of raw sugar that can come in. However, should the outcome of the negotiations with Australia in any way resemble that of the EU-Mexico agreement, where there is a tariff applied to the TRQ, then access to raw sugar will effectively be denied to our sector. This would place European companies and their workers unfairly on the line - with no justification on economic or sustainability grounds.
Fairness should remain a guiding principle for the EU’s position on sugar trade. As a sector, cane sugar refiners simply ask for a level-playing field with our beet sugar colleagues, who have seen the decline in white sugar prices go hand-in-hand with reduced costs for sugar beet. And while we fully understand that the current situation is challenging for beet growers across the EU, it should be noted that they can benefit from Direct Payments and schemes such as Voluntary Coupled Support under the Common Agricultural Policy.
Moreover, Australian sugar cane has an impressive sustainability record. The sector is largely unirrigated, therefore not impacting water scarcity. Likewise, the FTA’s impacts on water quality are expected to be minimal, according to the EU’s Sustainability Impact Assessment Draft Final Report. Nonetheless, our Australian sugarcane colleagues continue to identify and implement innovative farming practices that can enhance the sector’s sustainability, making sure that improved water quality and efficient farming go hand in hand. 1
Finally, the current modes of access to raw sugar for the EU mean that refiners are unable to import Australian raw sugar that is certified by the gold standard in sugar sustainability – Bonsucro. Not only does this hinder our capacity to lead the market in sustainability terms, but it also takes away the power of the European market to drive sustainability outside its borders. Currently, much of the sugar production in Australia is induced by demand from Asian countries, where the market demand for sustainable-certified sugar is simply not as high as in Europe.
It is time to show once and for all that trade can work for the benefit of people and the environment. That a “strong, open and fair trade agenda” means action and not just rhetoric from the new Commission. That trade is not an end in itself, but a tool that secures everyday real EU jobs, in real EU industries as it does for cane sugar refiners.