Blog: EU-Australia FTA: Making access to sustainable sugar economically viable
The European Union is undertaking a green revolution. As a result of the European Green Deal, sustainability principles now lie at the core of Europe’s growth strategy, underpinning every EU policy and programme. The goal: to make Europe the first carbon-neutral continent by 2050, and to ensure that long-term economic growth is decoupled from resource use. Driven by a strong demand from consumers themselves, the cane sugar sector has embarked on a quest for sustainability that will continue to transform and evolve in the years to come. Yet such progress can only be sustained and strengthened if access to sustainable sugar is economically viable.
As of today, access to raw sugarcane is severely limited, in direct contrast with the Union’s principles of liberalism and market competition. This has led to a sharp decline in refining margins, causing the closure of several EU sugarcane refiners and the consequent loss of highly skilled, associated jobs.
Against this backdrop, the only hope for EU refiners is to access sustainable, and economically viable raw materials via the Union’s future free trade agreements (FTAs). Ahead of the 12th Round of EU-Australia negotiations, which will be held on 11-22 October, it is important to stress what the inclusion of duty-free quotas on raw sugarcane would represent for the EU’s refinery sector and for consumers.
Australia is a formidable trade partner for EU agri-food products, including sugar. It is both a competitive supplier of raw sugar for EU refiners and a potential export market for the EU’s white sugar. Securing a duty-free quota to the world’s third biggest raw sugar exporter would ensure the survival of EU refineries without threatening the stability of domestic producers, as the TRQ mechanism will always limit the volumes of raw sugar that can enter the Single Market.
Moreover, Australian sugarcane has an impressive sustainability record. The sector is largely unirrigated, as such, it does not impact water scarcity. Our Australian sugarcane colleagues also continue to identify and implement innovative farming practices that can enhance the sector’s sustainability, making sure that improved water quality and efficient farming go hand in hand. The sustainability of most Australian sugar mills is further reconfirmed by the gold standard in sugar sustainability – Bonsucro’s certification. Failing to secure a competitive access to the Australian raw sugarcane market would thus not only impact the sector’s viability and food security, but it would also prevent EU consumers from purchasing some of the most sustainably produced sugarcane worldwide.
As the future of our sector wholly depends on the outcomes of the upcoming negotiations, we hope that the parties involved will realise the immense opportunities that a fair, liberalised FTA with Australia would bring to our sector, for EU consumers, and for the Union’s pledge towards a more sustainable future.