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

Media release

Monday, 31 October 2005 -  MVT80/2005

EU Must Reduce Sugar Export Subsidies by May 2006

The European Union must reduce its exports of subsidised sugar by May 22 next year according to a determination a WTO arbitrator on a dispute won by Australia, Brazil and Thailand against the EU.

Deputy Prime Minister and Minister for Trade Mark Vaile welcomed the decision on when the EU must implement the findings of the dispute by WTO Arbitrator Mr A V Ganesan, announced in Geneva over the weekend.

The ruling sets a legally binding timetable for the EU to limit its subsidised exports of sugar to 1.273 million tonnes a year and its annual expenditure on sugar export subsidies to €499.1 million.

Mr Vaile called on the EU to fully honour its WTO treaty commitments for sugar, and to comply with the WTO timetable.

“Provided the EU complies with its WTO treaty obligations, the Australian sugar industry can now plan the future marketing of exports against a legally binding timetable.

“EU exports are currently in the vicinity of 5 million tonnes per annum and are expected to be significantly more than that this year.

““The WTO ruling that the EU must substantially reduce its subsidised sugar exports are a victory for Australian sugar farmers, whose returns are often depressed by the enormous volumes of subsidised EU sugar in the world market.”

The EU proposes to implement the ruling as part of projected reforms to the EU sugar regime.  In the event the EU does not comply within the arbitrated time period, WTO rules permit Australia to take retaliatory action against EU imports, up to an assessed level of trade damage.  Alternatively, the EU could offer compensation pending compliance.

On 19 May, the WTO formally upheld the complaints of Australia, Brazil and Thailand, that all EU sugar exports are subsidised and that the EU is not entitled to exclude any quantities of sugar exports or any amount of export subsidy expenditure from its WTO export subsidy reduction commitments.

Contacts: Richard Forbes  02 6277 7420

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