WTO appeals court rules against EU sugar subsidies

Posted May 20, 2005: On April 28, the World Trade Organization’s appellate body ruled for Brazil, Australia and Thailand, and against the European Union, agreeing with an October 2004 WTO panel decision that the EU is dumping subsidized sugar on the world market in violation of WTO trade rules. The ruling gave the EU the normal 15 months to come into compliance, rather than the 90 day deadline requested by the three complaining countries. Nonetheless, the decision is a victory for Brazil, the world’s largest sugar exporter.

The EU, following much the same line as the US in the cotton case in which Brazil also largely prevailed, will likely argue that changes to its programs should come as part of the ongoing agriculture negotiations as part of the Doha trade round scheduled to conclude by late 2006. Internally, the EU was already expecting to announce reforms to its $2 billion a year sugar program on June 22, and it is unclear whether that reform proposal will be revamped in light of the new, final ruling.

The full ruling is posted on the web at http://www.wto.org/english/tratop_e/dispu_e/265_266_283abr_e.pdf