Extra export by EU opposed
Australia, Brazil and Thailand have called for the immediate withdrawal of an additional export of 500,000 tonnes of out-of-quota sugar by the EU, saying it was illegal under World Trade Organisation (WTO) rules.
The three states, which won a WTO dispute with the European Union over its sugar export subsidies five years ago, warned it they did not rule out further action, including the possibility of reopening the case which could lead to retaliation.
The European Union's executive Commission announced the extra sugar exports in the current 2009-10 marketing year last week as sugar prices hit 29-year highs.
A statement by the three sugar exporters said the extra 500,000 tonnes meant EU sugar exports in the current year could reach 1.85 million tonnes, 576,500 tonnes more than the 1.27 million tonne ceiling the EU is committed to under WTO agreements.
The European Union argues its ceiling is some 100,000 tonnes higher because of its expansion to 27 from 15 members since the current WTO agriculture agreement was signed.
Brazil's ambassador to the WTO, Roberto Azevedo, told a news briefing that the nature of the EU's sugar regime meant that all sugar produced there was subsidised. If more than the agreed quota of such sugar was exported, it amounted to a prohibited subsidy under WTO rules, and other affected countries did not need to prove any adverse impact, he said.
"The sugar that will now be dumped into the international market is the result of surpluses which were accumulated in a succession of inflated crops," Azevedo said. "Therefore they cannot claim that this surplus sugar is not subsidised because of market conditions today."
Azevedo said the three states feared the commission's action sent the wrong signal and would encourage growers and refiners to continue over-producing.
Keep up with the latest business news from the region with the Emirates Business 24|7 daily newsletter. To subscribe to the newsletter, please click here.
Follow Emirates 24|7 on Google News.