April 1, 2010

Is Caribbean rum in danger of losing the European market?


Ronald Sanders
Thursday, April 1st 2010
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.

Having convinced 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 March 19, 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.

Read full article here.

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