BRUSSELS, Belgium (AP) – The European Union yesterday reassured African, Caribbean and Pacific sugar exporters it would set up a new support system to help compensate for the loss of preferential treatment under upcoming reforms in the EU sugar sector.

The 25-nation EU is committed to changing its sugar policy, which offers huge subsidies to local producers and funds the exports of cheap sugar onto the world market, where developing nations cannot compete.

As part of its development policy, the EU pays above-market rates for sugar from a number of ACP nations, many of them former colonies of European powers. The loss of those privileges when the EU is expected to begin paying prices closer to market rates, would have a huge economic impact.

“One has to balance the European interests with the legitimate interest of the ACP nations and those of the least developed countries,” said Luxembourg Farm Minister Fernand Boden, who chaired the meeting.

“We are fully committed to finding ways to help them adapt to the new market situation they will face after reform,” said EU Farm Commissioner Mariann Fischer Boel.

The preferential access of ACP countries to the EU market represents some 70 per cent of the revenue of their sugar sectors.

Late yesterday, the 25 EU agriculture ministers met with several counterparts from the affected nations and discuss ways to limit the impact of the reform.

“Our message was that the reform process should not cripple the sugar industry,” said Mauritius Agriculture Minister Nandcoomar Bodha, who represented the 18 ACP nations with whom the EU has a sugar trade deal.

The EU was forced to change its policies after complaints from major sugar producing countries, such as Brazil and Australia, which argued that EU subsidies were unfair. The Geneva-based WTO agreed with part of those complaints in an October ruling.

As criticism mounted, the EU last year agreed the system was not sustainable and said it would enact a series of reforms. The bloc hopes to have a reform package worked out before the WTO meets in Hong Kong in December.

“Reform of the EU’s sugar regime is now urgent. The status quo is not an option,” said Fischer Boel.

The EU head office assured the ACP nations however, they would be able to continue to rely on preferential access. It would also help diversify industry in sugar-dependent areas and help nations adapt.