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Impact of changes in the European Union import regimes for sugar, banana and rice on selected CARICOM countries

Published date 2008-05-05
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From the abstract:

This document examines the effects on CARICOM countries of changes in the EU import regimes for banana, rice and sugar. Changes have been pursued by the EU since the formation of the Single Market in 1992 and were determined by both internal and external factors - cost to the EU budget and WTO requirements, respectively. Changes were made to tariff quotas affecting mainly non ACP exports of bananas to the EU market; reduction in the price of sugar in the EU market and reduction in both price and tariffs in the EU rice market. CARICOM banana exporters were the most affected by regime change given the small size of their banana operations and the high cost of production. The EU has been providing support for banana and sugar producing countries to improve competitiveness or diversify into other areas of production. It is argued that some CARICOM countries would find it very difficult to improve competitiveness given their small scale of production and relatively high cost of labour. However, the alternative of diversifying out of the traditional industries is not an effective solution in light of the role the industries play in sustaining livelihoods of rural communities as well as the culture of specific countries. Efforts at diversifying into alternative crops have not proved successful over the longer term. Instead, it is proposed that restructuring the traditional industries to produce for export niche markets as well as to produce value added products for domestic and regional markets would sustain the industries and address the twin concerns of agriculture and rural development.