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EU-Mercosur negotiations: Stand up for EU sugar and ethanol!

In a joint statement, the European Renewable Ethanol Association (ePURE) and the European Federation of Food, Agriculture and Tourism Trade Unions (EFFAT) call for "no concessions on sugar and ethanol" in the context of the EU-Mercosur trade negotiations.

Emmanuel Desplechin has been appointed new Secretary General of ePURE replacing Robert Wright (photo courtesy ePURE).

Emmanuel Desplechin Secretary-General of the European Renewable Ethanol Association (photo courtesy ePURE).

Brazil is the world’s largest producer and exporter of sugar, accounting for 52 percent of world net sugar exports in 2015. Brazil is also the second largest producer and exporter of ethanol worldwide.

According to a joint statement from the European Renewable Ethanol Association (ePURE), a trade association representing European renewable ethanol producers and the European Federation of Food, Agriculture and Tourism Trade Unions (EFFAT), a European Federation representing 120 national trade unions including sugar beet farmers and ethanol plant workers from 35 European countries, Brazil is already the single biggest beneficiary of the EU’s trade concessions on sugar.

From October 2017, Brazil’s “preferential access” to the EU market will rise to over 0.7 million tonnes per anum representing 52 percent of the EU’s total World Trade Organisation (WTO) quota for sugar, imports that are subject to a much-reduced duty. Furthermore, according to ePURE and EFFAT, the Brazilian sugar and ethanol sector has requested substantial additional access to the EU sugar and ethanol markets in the EU-Mercosur negotiations.

This request must be declined. The Brazilian government tips the playing field in its favour by offering extensive support to ethanol production and consumption. Since 94 percent of sugar mills also produce ethanol, support for ethanol works as a major cross-subsidy for Brazil’s sugar producers. In periods of high sugar and low ethanol prices, ethanol capacities may cheaply and easily be used to produce sugar.

According to the statement, the Brazilian government also offers some US$1.8 billion per annum in specific support to its sugar sector. Imports of subsidised sugar and ethanol from Brazil would therefore not be competing on a level playing field with sugar that is grown and manufactured in the EU.

There is no reason to open the EU market further to Brazilian sugar and ethanol. EU sugar production is expected to be more than sufficient to cover the EU’s needs from 2017/18. Ethanol production is also sufficient to cover EU demand, especially given the Commission’s intention to phase out the share of crop-based biofuels in the transport energy mix.

The EU sugar and ethanol sectors provide high-quality manufacturing jobs in some of the EU’s most vulnerable rural areas and serve as vital outlets for sugar beet farmers. The Mercosur negotiations represent an “existential threat” to the livelihoods of these individuals.

With the end of sugar production quotas fast approaching, the EU Member States and the European Parliament have a duty to defend them.

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