WRITTEN QUESTION E-2787/02

by Ulla Sandbæk (EDD) to the Commission

(3 October 2002)

Subject: Sugar

1. How will the Commission address questions of rules of origin, safeguard measures and supply side constraints on LDC production and export capacities in the coming Economic Partnership Agreements?

2. Would the Commission provide a detailed overview of the profit margins of the European sugar industry on a country-by-country basis? The overview should include an assessment of the EU sugar industry profit margins vis-à-vis other agricultural industries.

3. As part of the mid-term review of the Common Agricultural Policy, can the Commission provide a breakdown of the profit margins (both with and without subsidies) of the major crops produced under the CAP (wheat, barley, maize, rice, sugar etc)?

4. Can the Commission provide a listing of new products from least developed countries imported into the EU following the introduction of the Everything But Arms Initiative, which have benefited from the elimination of duties under the EBA Initiative?

Answer given by Mr Lamy on behalf of the Commission

(12 November 2002)

1. The Economic Partnership Agreements (EPAs) will provide a stable and predictable framework on rules of origin, based on the rules of origin and methods of administrative co-operation as defined in Protocol No 1 of Annex V to the Cotonou Agreement. In the context of the EPA negotiations, the Commission will assess any specific request for changes to the rules of origin, especially presented by the African, Caribbean and Pacific group (ACP), aimed at improving current market access for the ACP or the control of the scheme. The Union's directives for the negotiations of EPAs states that the safeguard provisions of the Cotonou Agreement (Articles 8-11 of Annex V) will apply, in accordance with the relevant provisions of the World Trade Organisation.

Overcoming supply constraints is a central objective for EPAs. By removing obstacles to trade between the ACP and the Union, EPAs will contribute to trade policy reforms within the ACP, introducing increased openness and transparency and creating a more predictable policy framework. This will help to mobilise economic operators and to attract investment. Certainly, development support will also be required. It is therefore important to note that, despite their independent legal standing, the EPAs remain an integral part of the Cotonou approach. To ensure that necessary trade and adjustment measures can be adequately addressed, the programming exercise for the 9th European Development Fund (EDF), which is nearly completed, has mainstreamed trade into development co-operation programmes, especially at the regional level. Overall, programmes to be funded by the 9th EDF in the area of ACP regional integration and trade capacity building currently amount to an estimated EUR 485 million. The mid-term and end-term reviews foreseen by the Cotonou Agreement will pay particular attention to the coverage of EPA related preparations.

The Commission has also agreed with individual ACP countries and regions a series of programmes to meet trade capacity needs in the medium and long term. It is also actively engaged in export promotion efforts in a number of ACP countries.

Further to this, there are also horizontal programmes, accessible to all ACP countries, which are designed to strengthen export capacity. Two major examples are for the horticultural and fishery's sectors, which aim at assisting the ACP to align themselves with the requirements relating to sanitary and phytosanitary standards for exporting these products.

2. A detailed overview of the profit margins of the European sugar industry on a country-by-country basis is not available at the present time. However, an external study is currently being undertaken in the context of the reform of the common organisation of the market in sugar, which should cover these issues.

3. A breakdown of the profit margins (both with and without subsidies) of the major crops produced under the common agricultural policy is not available at the present time and is under investigation within the framework of the overall impact analysis of the mid term review communication.

4. Council Regulation (EC) No 416/2001(1) sets out the products liberalised under the Everything But Arms (EBA) Initiative. Figures for 2001 of preferential imports under EBA have only been available since September 2002 and as two years at least are necessary to objectively assess the impact of the EBA initiative, it is too early to carry out an assessment.

(1) Council Regulation (EC) No 416/2001 of 28 February 2001 amending Regulation (EC) No 2820/98 applying a multiannual scheme of generalised tariff preferences for the period 1 July 1999 to 31 December 2001 so as to extend duty-free access without any quantitative restrictions to products originating in the least developed countries, OJ L 60, 1.3.2001.