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MELBOURNE, Australia (Oct. 11, 2002 – Radio Australia)---Fiji's government says its ailing sugar industry could collapse if Australia and Brazil are successful in challenging the European Union's protocol on existing sugar subsidies.

Under the protocol, the EU buys sugar from the African, Caribbean and Pacific (ACP) group of countries at around two and one-half times the market price.

Australia and Brazil have protested, saying some of the subsidies go beyond the level agreed at the Uruguay round of World Trade Organization talks.

The two countries are seeking consultation with the EU on the issue.

Fiji's foreign minister Kaliopate Tavola says the challenge could have a devastating impact on the industry.

"The impact of the challenge can be devastating for Fiji even though the Australians and Brazilians have said that they do not want to harm the ACP group," Mr Tavola says.

"The impact can be devastating because they're questioning the elements of the sugar regime and once you do that you just open a Pandora’s box," he says.

For additional reports from Radio Australia, go to PACIFIC ISLANDS REPORT News/Information Links: Radio/TV News/Radio Australia.

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