The ACP/EU Sugar Protocol

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The ACP and the EU have benefited mutually from a long and fruitful relationship in the sugar sector under the terms of the ACP/EU Sugar Protocol. This agreement, which was signed in 1975, guarantees access to the EU market for fixed quantities of ACP sugar at preferential prices over an indefinite period of time. The Sugar Protocol has been hailed the world over as a model for development cooperation, as it has brought significant benefits to the economies of small and vulnerable ACP countries.

The Sugar Protocol is a legally binding intergovernmental agreement between the ACP signatory States and the European Union with obligations to be met by all contracting parties. As a consequence, any reform of the EU Sugar Regime must respect the rights and obligations enshrined in the Protocol.

See pages 383 to 394 of The Cotonou Agreement for more information.

Agreed Quantities

The Sugar Protocol is an agreement between governments whereby the EU Member States guarantee to buy and import agreed quantities of sugar which the ACP Signatory States undertake to sell.

The Sugar Protocol states that,

'the [European] Community undertakes for an indefinite period to purchase and import, at guaranteed prices, specific quantities of cane sugar, raw or white, which originate in the ACP states and which these States undertake to deliver to it'

- Article 1 of the ACP/EU Sugar Protocol

'Subject to Article 7, these quantities may not be reduced without the consent of the individual states concerned'

- Article 3(2) of the ACP/EU Sugar Protocol

The EU regulation on the common organization of the markets in the sugar sector (No. 2038/1999) ensures that the Protocol quantities are irreducible even in cases where the Community has to reduce A&B production quotas on account of its Uruguay Round commitments.

Further, Article 1 of ACP/EU Sugar Protocol is reflected in the ACP/EU Partnership Agreement ("Cotonou Agreement") which states that:

'In accordance with Article 25 of the ACP-EEC Convention of Lomé signed on 28 February 1975 and with Protocol 3 annexed thereto, the Community has undertaken for an indefinite period … to purchase and import, at guaranteed prices, specific quantities of cane sugar, raw or white, which originates in the ACP States producing and exporting cane sugar and which those States have undertaken to deliver to it.'

- Article 13 of Annex V: Trade Regime Applicable During the Preparatory Period

This underlines the indefinite nature of the Protocol, since economic or other difficulties in the EU which might lead to a modification of the arrangements under the Convention, cannot lead to, nor cannot be invoked to justify, any modification of the indefinite nature of the commitments under the Sugar Protocol.

Guaranteed prices

Guaranteed prices for ACP white or raw sugar apply to bulk sugar cost insurance and freight paid (CIF) to European ports delivered under the Sugar Protocol.

ACP guaranteed prices are negotiated annually between the EU and the ACP states signatory to the Sugar Protocol, 'within the price range obtaining in the Community, taking into account all relevant economic factors'. - Article 5(4) of the ACP/EU Sugar Protocol

In practice, the ACP states receive the same price as Community sugar producers. This is because Community has always linked the guaranteed price for ACP raw cane sugar to the intervention price for EU produced raw sugar, and the guaranteed price of white sugar to the derived intervention price in the UK. The level of the guaranteed price is that at which, 'the Community undertakes to purchase, within the agreed quantities, preferential sugar which cannot be marketed in the Community at a price equivalent to or in excess of the guaranteed price.' - Article 5(3) of the ACP/EU Sugar Protocol

Without a Guaranteed Price taking into account all relevant economic factors, the Sugar Protocol would become "an empty shell".

Indefinite duration of the Sugar Protocol

The term "indefinite duration" was not included in Article 1 of the Sugar Protocol by accident; it was included in the Protocol to give a precise legal guarantee to ACP sugar supplying states, reflecting the guarantees which had preceded the Protocol in the Commonwealth Sugar Agreement, and the obligations of the European Community in the Treaties. The provisions of the Sugar Protocol, the Lomé Convention(s) and the new Cotonou Agreement, to which the the Sugar Protocol has been attached for institutional convenience, were carefully drafted so as to reflect this commitment and the independence of the Sugar Protocol and the mechanism for its continued implementation should the Cotonou Agreement cease to exist.

The legal aspects of the Sugar Protocol were contained in the various clauses of the Protocol itself and in Article 213 of the IVth Lomé Convention and, as discussed above, in the Cotonou Agreement.

· Article 1(1) of the Protocol states that the Community's undertaking to purchase, and the ACP undertaking to sell, specific quantities of sugar at guaranteed prices is for an indefinite period.

· Article 10 of the Sugar Protocol stipulates that it may be denounced by the Community with respect to each ACP State subject to two years' notice. However, in a Declaration annexed to the Protocol the Community formally declares that Article 10 is for juridical security and does not represent for the Community any qualification or limitation of the principle enunciated in Article 1(1), viz. the undertaking to purchase sugar for an indefinite period.

· All the guarantees contained in the Sugar Protocol are also enshrined in the IVth Lomé Convention which, in its Article 213, reiterates the commitments undertaken in terms of the Protocol, notably the indefinite duration of the Protocol, the non-applicability of the safeguard clause under Article 177 of the Convention, and the fact that should the Convention be terminated, measures must be taken to secure the continued application of the Sugar Protocol.

· As the Lomé Convention to which the Sugar Protocol is attached was originally concluded for five years, it was provided in Article 8(2) of the Protocol that, should the Convention cease to be operative, the sugar supplying states and the Community would adopt appropriate institutional provisions to ensure the continued application of the provisions of the Sugar Protocol.

· Article 1(2) of the Sugar Protocol states that the implementation of the Protocol is carried out within the framework of the management of the common organization of the sugar market (the EU sugar régime) which, however, shall in no way prejudice the commitment of the Community under Article 1(1), that is to purchase sugar for an indefinite period. Indeed, it flows from this stipulation that any modification of the EU sugar régime cannot affect the continued application of the provisions of the Sugar Protocol.

All the above provisions, both under the Sugar Protocol and reinforced under the Lomé Convention, constitute very clear, precise and juridical guarantees that the application of the Protocol is for an indefinite period.