The Hon. Mark Vaile, MP
The Hon. Mark Vaile, MP

Media Release

Tuesday, 8 July 2003 - MVT52/2003

Australia to Formally Challenge EU Sugar Subsidies

Australia will join Brazil and Thailand in requesting a World Trade Organisation panel to examine whether EU sugar export subsidies comply with world trade rules, Trade Minister Mark Vaile announced today.

"The EU is currently exporting highly subsidised sugar, distorting world markets to the detriment of sugar exporters worldwide, including Australia," Mr Vaile said.

"We have joined Brazil and Thailand in seeking an investigation because we believe aspects of the EU's support for its sugar regime are clearly contrary to WTO rules.

"Australian sugar producers depend on the world market for approximately 80 per cent of their incomes and are probably more exposed to world price movements than any other sugar exporter. Australia's sugar industry fully supports the Government's action and has provided valuable input to the development of our case."

The EU is the world's largest exporter of white sugar. The EU spends more than A$10 billion on price support and in excess of A$2.7 billion on export subsidies on more than six million tonnes of sugar.

"The Uruguay Round subsidy obligations required countries to reduce subsidised exports. The EU's current subsidised sugar exports are more than they were before the Uruguay Round. Sugar was excluded from the latest EU reforms to the Common Agricultural Policy and some EU sugar interests are already calling for an extension of the present regime from 2006 to 2011, despite a current review scheduled to conclude in 2004," Mr Vaile said.

"Australia has assured ACP countries our WTO action is not an attack on their preferential quota access of approximately 1.3 million tonnes into the EU market. Our challenge will not prevent the EU from honouring its treaty commitments to ACP sugar exporters."

Australia is also concerned at the distortions caused by the sugar regimes of other developed countries, including the United States and Japan. Australia is pursuing those concerns through bilateral and multilateral channels.

Australia will request the establishment of a panel at the 21 July Dispute Settlement Body meeting in Geneva. A WTO Panel usually takes 9 -12 months to report. Findings may be appealed on questions of law - a process of about three months.

Contact: Matthew Doman 02 6277 7420

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