Searchlight Logo
special_image

    • News
      • Front Page
      • News
      • Breaking News
      • Press Release
      • Features
      • Special Features
      • From the Courts
      • Sports
      • Regional / World
    • Opinions
      • Editorial
      • Our Readers’ Opinions
      • Bassy – Love Vine
      • Dr. Fraser- Point of View
      • R. Rose – Eye of the Needle
      • On Target
      • Dr Jozelle Miller
      • The World Around Us
      • Random Thoughts
    • Advice
      • Kitchen Corner
      • What’s on Fleek this week
      • Health Wise
      • Physician’s Weekly
      • Business Buzz
      • Hey Rosie!
      • Prime the pump
    • ePaper
    • Obituaries
      • In Memoriam / Acknowledgement
      • Tribute
    • Contact Us
      • Advertise With Us
      • Letters To The Editor
      • General Contact Information
      • Contact our Webmaster
    • About Us
      • Interactive Media Ltd
      • St. Vincent & the Grenadines
    • Subscribe
    • News
      • Front Page
      • News
      • Breaking News
      • Press Release
      • Features
      • Special Features
      • From the Courts
      • Sports
      • Regional / World
    • Opinions
      • Editorial
      • Our Readers’ Opinions
      • Bassy – Love Vine
      • Dr. Fraser- Point of View
      • R. Rose – Eye of the Needle
      • On Target
      • Dr Jozelle Miller
      • The World Around Us
      • Random Thoughts
    • Advice
      • Kitchen Corner
      • What’s on Fleek this week
      • Health Wise
      • Physician’s Weekly
      • Business Buzz
      • Hey Rosie!
      • Prime the pump
    • ePaper
    • Obituaries
      • In Memoriam / Acknowledgement
      • Tribute
    • Contact Us
      • Advertise With Us
      • Letters To The Editor
      • General Contact Information
      • Contact our Webmaster
    • About Us
      • Interactive Media Ltd
      • St. Vincent & the Grenadines
    • Subscribe
One Region
April 1, 2010

Caribbean Rum in grave danger. Urgent government action needed

THE European Commission (EC) has, once again, let down the Caribbean. This time on rum. All rum producers in the Dominican Republic and Caribbean Community (CARICOM) countries are facing the grim prospect of losing their markets in Europe.{{more}}

Having convinced the Caribbean’s negotiators to sign a full Economic Partnership Agreement (EPA) with the 27-nation European Union (EU) on the basis that it was not necessary to include specific language on rum because it was covered in Declaration XXV in the Cotonou Convention, the EC is now reneging on its undertakings and many rum companies face a grave financial crisis.

CARIFORUM countries – the independent member states of CARICOM plus the Dominican Republic – agreed to a full EPA in December 2007 under considerable pressure from the EC, including the threat that if they did not sign, a higher tariff would be applied to their vital exports, such as sugar, rice and bananas, making them uncompetitive with other countries.

The single paragraph on rum in the EPA was not worth the paper it was written on, and a few weeks ago – on 19th March, a ministerial meeting of EU and African, Caribbean and Pacific (ACP) countries initialled the text of the second revision of the Cotonou Agreement, which is the legal basis for relations between the EU and the ACP, with no attention paid to the plight of rum producers. The EC objected to specific language on rum in the revised text, overriding ACP protests that it did not provide the substantial guarantees that the original Cotonou Declaration gave to the rum industry.

Why Caribbean country representatives allowed this to happen is a very relevant question, and perhaps, at some point, an explanation will be given.

There are several important points in this whole saga.

The West Indies Rum and Spirits Producers Association (WIRSPA) was realistic enough to recognise that the EC would not continue to give them preferential access to the EU market. Therefore, in 2002 they accepted the EC’s proposal of “a reasonable period” (up to between 2016 and 2018) to adapt their production facilities and brands so that they could compete equitably with other producers such as the Latin American countries.

The EU agreed to establish a fund of 70 million Euros under the 8th European Development Fund (EDF) to facilitate the adaptation of production facilities by Caribbean rum companies. But to access this fund, companies first had to provide at least matching amounts of money, recovering the EDF grant element only when their upgrading or marketing projects are completed.

Many of the companies borrowed money on commercial terms to undertake the projects. They did so expecting the programme to continue until at least June 2010 when the funding window was scheduled to be closed.

However, with about 14 million Euros still in the Fund, the EC is closing it this month (March) on the basis that the rules of the 8th EDF demand it. This means that the rum companies cannot get reimbursement for the money they’ve invested on projects that cannot be completed by the cut-off date on which the EC has insisted.

The original cut-off date of June 2010 was unrealistic, and the new date of March 2010 is even more so. This fact was recognised by the EU’s own Programmes Monitors who supported an extension of the Fund for 18 months to December 2011.

In a more sinister development, while the EC has been hiding behind a Council Regulation that prohibits the 18 months extension, it has been busy trading away the small and limited preference that Caribbean rum has in the EU market. Earlier this month (March 8th) the EC formally told the Caribbean that they have already settled liberalized tariffs and quotas with Colombia and Peru and are now talking in similar terms with Central American and Andean countries.

These deals are accelerating Latin American access to the EU market and seriously undercutting the period that Caribbean rum producers had been led to believe would exist to facilitate the adaptation of their production and their readiness to compete.

Caribbean rum producers have expressed their “anger” at Europe for “reneging on previous agreements that aimed to ensure a smooth transition into a fully competitive European market”. And, so they should, for they were among the most vocal in supporting the full EPA that CARIFORUM countries signed with the EU. They have a right to feel betrayed.

Many Caribbean commentators at the time spoke out against the EPA, warning that there should be no reciprocal trading arrangement between small Caribbean countries individually and the huge EU collectively. They also argued that Europe had an obligation – if not rooted in historical exploitation, at least founded in the principles of fairness and equity – to provide Caribbean countries with the means to become less uncompetitive in an international economic system that favours the large and powerful.

At the very least, they argued, the Caribbean should be given sufficient time and adequate financial and technological resources to cope.

Despite these calls, Caribbean governments signed an imbalanced EPA that went beyond requirements of the World Trade Organisation (WTO) in giving the EU unprecedented right of access to, and establishment in, CARIFORUM countries.

Now we have the major fall out of Caribbean rum.

The EC will not agree to two reasonable things that rum producers are requesting. The first is an extension of the 8th EDF funding by 18 months to allow them to be reimbursed for the money they spent trying to keep up their end of a bargain with the EU; and the second is an impact study of the effects of early liberalisation on the Caribbean’s rum industry.

Letters written on behalf of the region by Belize Prime Minister Dean Barrow, Barbados Foreign Minister Maxine Maclean and Suriname Foreign Minister Lygia Kraag-Keteldjik to the EC have all fallen on deaf ears.

Letter writing is not enough. It’s time for Caribbean governments to do more; and to do so more militantly and robustly than in the past.

A high-level team should be despatched to Europe now, not only to talk to governments but to take the case beyond governments to the media, non-governmental organisations and, ultimately, the people of Europe. It would take only a handful of determined EU governments to persuade the EC to find ways around the regulation that prohibits this very necessary extension of the fund for rum, and to conduct the impact study.

There are some EU governments ready to help, and they lament the absence of strong Caribbean government representation.

Informed observers in Europe are convinced that the European Commissioners believe that Caribbean governments are supine and, therefore, the EU can carry on stitching-up deals with Latin America that leave the Caribbean on the sidelines.

Caribbean governments must prove the EC wrong, or they, too, will be guilty of failing the region’s iconic rum industry.

Responses and previous commentaries at: www.sirronaldsanders.com

  • FacebookComments
  • ALSO IN THE NEWS
    Pharmacist in Calder shooting granted $30,000 bail
    Front Page
    Pharmacist in Calder shooting granted $30,000 bail
    Webmaster 
    October 17, 2025
    A Pharmacist, charged with attempted murder, has been granted bail in the sum of $30,000. Esworth Lewis, who is alleged to have shot a man about his b...
    Bigger things in store  for former SVG Consul General to Toronto – PM
    Front Page
    Bigger things in store for former SVG Consul General to Toronto – PM
    Webmaster 
    October 17, 2025
    A higher posting will be offered to former SVG Consul General to Toronto, Fitz Huggins, who recently demitted office. Huggins concluded his ambassador...
    Venezuelans  remain resillent, determined  despite massive sanctions by US
    Front Page
    Venezuelans remain resillent, determined despite massive sanctions by US
    Webmaster 
    October 17, 2025
    Over $20 billion in Venezuelan assets abroad remain frozen, while the country has suffered a 99% loss of foreign income since February, 2014. But desp...
    PM not ready to ‘ring the bell’ at ULP Layou rally
    Front Page
    PM not ready to ‘ring the bell’ at ULP Layou rally
    Webmaster 
    October 17, 2025
    While many may have felt the date for the general elections in St. Vincent and the Grenadines would have been announced at the Unity Labour Party’s ‘W...
    Schools get in on World Food Day celebrations
    Front Page
    Schools get in on World Food Day celebrations
    Webmaster 
    October 17, 2025
    World Food Day, celebrated annually across the globe on October, 16, to commemorate the date of the founding of the United Nations (UN) Food and Agric...
    Mitres makes history as inaugural Semi-Pro Netball Champions
    Sports
    Mitres makes history as inaugural Semi-Pro Netball Champions
    Webmaster 
    October 17, 2025
    Mitres Netball Team wrote their name into local netball history, when they captured the inaugural Semi-Professional Netball League title on Wednesday ...
    News
    More than 1000 families have received appliances says PM
    News
    More than 1000 families have received appliances says PM
    Webmaster 
    October 17, 2025
    The government’s allocation of $1.5 million in the 2025 budget to provide essential household appliances, including refrigerators, stoves, and washing...
    Urban transformation to follow Kingstown Port opening
    News
    Urban transformation to follow Kingstown Port opening
    Webmaster 
    October 17, 2025
    Minister with responsibility for urban development, airports and seaports, Senator Bernarva Browne, is looking forwards to the start of much bigger th...
    New York Times claims cocaine washed up in Grenadines
    News
    New York Times claims cocaine washed up in Grenadines
    Webmaster 
    October 17, 2025
    On October 14, 2025, The New York Times, in an article headlined “Drug Smugglers Change Supply Routes to Evade U.S. Warships”, showed a photograph of ...
    This election is a galaxy of stars, says Gonsalves
    News
    This election is a galaxy of stars, says Gonsalves
    Webmaster 
    October 17, 2025
    The upcoming general elections in St Vincent and the Grenadines will be about the ability of the political candidates to shine. That is the conclusion...
    Vote without fear – Senator John
    News
    Vote without fear – Senator John
    Webmaster 
    October 17, 2025
    Electors waiting to vote in the next general elections are being asked to do so without fear as the ballot is secret and no one can know who you voted...

    E-EDITION
    ePaper
    google_play
    app_store
    Subscribe Now
    • Interactive Media Ltd. • P.O. Box 152 • Kingstown • St. Vincent and the Grenadines • Phone: 784-456-1558 © Copyright Interactive Media Ltd.. All rights reserved.
    We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it.Ok