EU sugar subsidies illegal, WTO rules

April 28, 2005

28 April 2005

EU sugar subsidies illegal, WTO rules

The following article is excerpted from the 28 April 2005 edition of “The Journal of Commerce”.

The World Trade Organization … ruled that the European Union's subsidies to sugar producers are illegal….

The WTO's appeals body upheld a 2004 decision by a WTO panel that European sugar exporters are getting more in government handouts than is allowed under trade rules, thereby bringing down the price of sugar on the world market and making it impossible for producers in other countries to compete….

“We had hoped the appellate body would take account of our arguments," the Associated Press quoted EU Agriculture spokesman Michael Mann as saying. "Of course we will comply with the ruling."

"We are already planning a far-reaching reform of our sugar regime," he added. He said changes that needed to be made because of the ruling would be written into the reform proposal before it is released on June 22. …

Brazil, Australia and Thailand, all major sugar producers, made the original complaints. Thursday's ruling is final and cannot be appealed.

EU sugar prices are more than four times higher than the global market rate and are protected by massive import tariffs.

Brussels also pays out export subsidies to get millions of tons of sugar a year off its market, helping to keep EU prices high and support Europe's farmers. The 1994 WTO Agriculture Agreement sets a quota of 1.43 million tons for which the EU is allowed to pay subsidies. …


Topic(s): 
International Initiatives
Information Source: 
World Customs Organization (WCO) / World Trade Organization (WTO)
Document Type: 
Email Article