Brussels, 23/09/2005 (Agence Europe) - On Thursday, the European Commission's Sugar Management Committee accepted the European Commission's proposal to declassify 1.8 million tonnes of sugar from the quota system for the 2005-2006 marketing year. This will push the surplus sugar from the EU market onto the world market and has been criticised by Australia, Brazil and Thailand, the three countries that appealed to the World Trade Organisation in May this year against the European sugar export regime (see EUROPE 8938).
The measure will classify sugar produced under the quota system as category C sugar (produced outside the quota system) and has already been used in the 2001-2002, 2002-2003 and 2003-2004 marketing years (not in 2004-2005). Australia, Brazil and Thailand want the WTO dispute settlement body meeting on 27 September to examine the legality of the measure. The three countries argue that the EU must take rapid measures to cut exports of subsidised sugar, noting that the WTO panel decided in May of this year that while category C sugar does not receive direct export subsidies, it is cross-subsidised in effect with income from the relevant production of Quotas A and B.