A comparison between the Cotonou Agreement and the EU Generalized System of Preferences

Abstract

PurposeThe aim of this paper is to critically analyse the trade preferences offered by the European Union (EU) to developing countries under the Cotonou Agreement and the Generalized System of Preferences (GSP) in relation to trade in sugar. There is a need for a timely examination of this area, given the context of the ACP‐EU Economic Partnership Agreements and the recent termination of the ACP‐EU Sugar Protocol (SP).Design/methodology/approachThe paper focuses on the Caribbean region as a whole with a particular focus on two non‐least developed ACP Caribbean countries, Guyana and Jamaica which held the largest sugar quotas among ACP Caribbean which benefited from the SP.FindingsThe EU trade regime changes have affected the value of the African‐Caribbean and Pacific (ACP) sugar trade regime and could have a serious impact on the amount of sugar available for purchase on the global market. The paper argues that ACP Caribbean countries could find more profitable to grow sugarcane as an agricultural commodity to produce biofuel, which is currently in high demand.Research limitations/implicationsThe analysis in this paper is limited to the arrangements pertaining to developing countries and therefore excludes those relating to least developed countries. Trade in more highly processed sugars such as fructose or glucose, together with the growing trade in biofuel refined from sugar beet and sugar cane are also outwith the scope of this discussion.Originality/valueThe paper deals with an intricate issue. It discusses the socio‐economic impact of the trade regime changes on the selected Caribbean countries and includes a section on recommendations given the economic weight of sugar for these countries.