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The Delegation of the European Union to Mozambique would like to correct the information published by the CoM on 19 November 2016 taken from Correio da Manhã, as that article contains several mistakes on trade in sugar and the Economic Partnership Agreement (EPA). The claims that ‘duty-free and quota-free trade of sugar from Mozambique to the EU will end’ is incorrect and the statements on EU-support to Sugar ending are also incorrect.
The Delegation of the European Union would like to clarify as follows:
Mozambique´s sugar exports to the EU will remain duty-free and quota-free
Currently sugar from Mozambique is exported to the European Union (EU) under the “Everything But Arms” (EBA) arrangement. The EBA started in 2001, to give all Least Developed Countries (LDCs) full duty-free and quota-free access to the European Union market for all their exports with the exception of arms and armaments. The EBA is still fully in place and Mozambique today exports duty-free and quota-free to the European Union.
The recently signed Economic Partnership Agreement (EPA) also allows for sugar from Mozambique to continue to enter the European Union market duty-free and quota-free. Of the Southern African Development Community Group of countries having negotiated an EPA, only South Africa has some level of quotas for sugar to enter duty-free to the EU.
In the last years Mozambique continued to export sugar to the European Union as below:
Regarding the evolution of the price of sugar in the EU market in recent years, the price of sugar has decreased in the EU due to the reform of the Common Agriculture Policy. In 2005, the EU began far-reaching reforms of its sugar sector resulting in a cut of 36% over four years (2006-2010) on the guaranteed price for raw sugar, which is the main variety exported by Mozambique. And with the abolished internal quotas, the EU is producing more competitive sugar (beetroot).
The EU is aware of the difficulties posed by the reform of its Common Agricultural Policy, which includes the sugar sector and is assisting some countries (including Mozambique) in adjusting during this period. To support the adjustment process, the EU established an assistance scheme called Accompanying Measures for Sugar Protocol Countries (AMSP), under which it is providing aid to the 20 ACP Sugar Protocol Countries, in addition to the established European Development Fund assistance.
The AMSP supports National Adaptation Strategies aimed at enhancing competitiveness of the sugar sector where that is objectively feasible, economic diversification and broader impact areas such as social protection, the environment, energy or macro-economic stability. The Sugar Sector in Mozambique is well aware of the challenges and they have been looking for alternatives of diversification, e.g. source of energy, production of ethanol.
The correct figure for funding under the AMSP for Mozambique is €11.5 million. Mozambique benefited from three phases of AMSP support: Phase I in 2006 of € 0.56 Million; Phase II (2007/2010) of €6 Million and the on-going Phase III (2011-2013) of €4.9 Million). The AMSP (2011-2013) programme is still on-going and discussions are on-going to extend its implementation up to 2019.
The overall objective of the current programme is to promote the competitiveness of the sugar sector and enhance its contribution to poverty alleviation in the rural areas of Mozambique, in line with the National Sugar Adaptation Strategy. And its specific objective is to increase sugarcane production and productivity, by promoting the participation of Mozambican small farmers in the sugar production chain.
Reference document: SADC EPA published in the Official Journal of the European Union: http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2016:250:0003:2120:EN:PDF
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