Call for no sugar and ethanol concessions in EU-Mercosur negotiations

EU sugar and renewable ethanol producers, sugar beet farmers and workers have called for no concessions on sugar and ethanol in the EU-Mercosur negotiations between the European Union and Brazil.

Globally, Brazil is the largest producer and exporter of sugar, and the second largest producer and exporter of ethanol. It is also the single biggest beneficiary of EU trade concessions on sugar, according to a joint statement from ePURE, the European Renewable Ethanol Association, and EFFAT, the European Federation of Food, Agriculture and Tourism Trade Unions.

“From October 2017, Brazil’s preferential access to the EU market will rise to over 0.7 million tonnes p. a., representing 52% of the EU’s total WTO quota for sugar. All these imports are subject to a much-reduced duty,” claims the statement.

As part of the EU-Mercosur trade negotiations, Brazil has requested even greater access to the EU sugar and ethanol markets. “This request must be declined,” says the statement. “The Brazilian government tips the playing field in its favour by offering extensive support to ethanol production and consumption. Since 94% 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.”

Brazil also provides specific support to its sugar sector to the amount of $1.8 billion (€1.6 billion) per year. According to the statement, these subsidies mean sugar and ethanol imports from Brazil would not be competing on a level playing field with sugar and ethanol produced in the EU.

The joints statement argues that EU sugar production is expected to be more than sufficient to cover its own demand from 2017/18, rendering the incentives to the Brazilian ethanol and sugar industries unnecessary. They also point out that the EU’s sugar and ethanol industries provide vital employment in some of the continent’s most vulnerable areas, something the EU-Mercosur negotiations present an “existential threat” to.