Brussels / Geneva, 08/07/2003 (Agence Europe) - After the vain attempt to reach a friendly solution last winter, Australia, Brazil and Thailand decided to call on the World Trade Organisation (WTO) to go on to the arbitration phase of the dispute that brings them into confrontation with the Union over its sugar subsidy regime. The request to set a panel of experts in place should be submitted to the Dispute Settlement Body on 21 July, Mark Vail, Australian Trade Minister, said when announcing the decision.
According to Australia and its two Cairns partners, the Union exports highly subsidised sugar, which causes distortion on world markets at the expense of the other exporters, Mr Vail said. He explained that his country rallies to the Brazilian and Thai offensive because "we believe that some aspects of the EU's support to its sugar regime clearly run counter to WTO rules". In this united offensive, Brazil, the global market leader, criticises the refunds that its main competitor has been granting directly to sugar exports for almost half a century, mainly to sugar from ACP countries and India, as well as to C sugar (a surplus beyond the Community quota), intended for the global market. Australia goes further, denouncing the over-high subsidies to processed products containing sugar and used, according to Canberra, to offset the high cost of raw materials in Europe. Thailand, which believes this affair presents less direct stakes, follows closely behind. During consultations in Geneva, the European Commission had rejected such allegations. In its view, the common sugar regime is not detrimental to competition and the files submitted by Brazil and Australia are essentially directed against the current provisions, set in place for decades now by the EU, which provide for preferential access to be reserved to the ACP countries and to India.
The ACP countries, from which the Union imports over 1.3 million tonnes of sugar annually at guaranteed Community prices (more expensive than global rates) in the context of the sugar protocol, have already expressed concern and solidarity with the Union and take its side in consultations. Fourteen of them were present in Geneva as "third parties", as was India as an "interested party". They will no doubt also join with the Union in order to block the first request of the trio but in second place. They will not be able to do anything. The binding phase of the dispute settlement procedure will be automatically triggered off, no doubt after the summer break. In this affair, Brazil alone speaks of injury amounting to one billion dollars.