Blog: To overcome the crisis, trade is Europe’s best ally
The world is facing an unparalleled challenge as a health crisis increasingly develops into a historical and unforeseen economic fallout. Trade is expected to be disproportionally affected by the economic slowdown. The WTO estimates that global merchandise trade could fall by up to 32% in 2020 due to the Covid-19 pandemic.
Following the onset of the crisis, inward-looking measures implemented across the world threatened to further undermine the multilateral trade system, which struggled long before the present challenges. No less than 80 countries have introduced export restrictions as a result of the pandemic.
Such lack of cooperation at the multilateral level poses a risk to global supply chains and public welfare. Cross-border trade is essential to ensuring consumers can access high-quality, competitively priced goods in the shelves of their local shops. If anything, the crisis has exposed how interdependent industrial economies are today and rendered cooperation with trade partners more necessary than ever.
ESRA is the voice of European cane sugar refineries in Brussels. We represent full-time refineries across four countries, supporting over 4500 direct and indirect jobs. As our raw material is not produced in Europe, our sector is a real-life example of why trade must be kept unhindered – and why the idea of self-reliance is in itself a risk to Europe’s food security.
Thanks to our use of a different raw material for producing sugar, cane refiners provide European consumers with choice, competition, and a link to global markets. Diversification across different geographies is what ensures supply chains’ resilience during shocks and crises such as the current one.
In the case of cane sugar this is only possible to the extent that we are granted market access to imports from third countries. We therefore commend the Commission’s commitment to continuing talks with Australia by taking the 7th round of negotiations to virtual format. Duty-free quotas for Australian raw cane sugar will not only provide EU consumers with diversity of choice, but also allow them to access sugar produced by one of the highest sustainability standards, the Bonsucro certificate.
We also welcome the official conclusion of the agreement with Mexico. This is a positive indication that trade policy has not lost momentum, even if we deeply regret the attachment of a duty of €49/tonne to the 30,000 tonne TRQ negotiated in the deal, which effectively hampers our access to Mexican raw cane sugar.
Furthermore, we certainly hope to see progress in the ratification of the EU-Mercosur agreement, the EU’s largest negotiated deal to date. Even if no new quotas for sugar were created for Brazil under the agreement, the removal of import duties on part of the existing quota under the EU’s WTO schedule would mean significant relief for Europe’s cane sugar refiners.
Diversifying Europe’s food production chains is key to ensuring security of supply for our consumers – both by securing access to raw material and accessing export markets for Europe’s high-value food products. The cane refining sector stands as proof that protectionism can harm producers and consumers alike. Europe has much to gain from moving forward with an ambitious trade agenda and by recognising in time that, to overcome the crisis, trade is Europe’s best ally.