Backlash brewing over Europe's sugar stand
Thailand, Brazil and Australia are seeking to retaliate against the European Union for ignoring the WTO's final ruling to end Europe's sugar export subsidy.
A Commerce Ministry source said last week that the three leading sugar exporters have already submitted documents to the World Trade Organisation asking for approval to take punitive measures, including raising tariffs, against the EU. The countries have also asked for compensation for their export losses due to the alleged continuation of subsidies. If the WTO decides that the EU is shirking its obligations under the WTO's rulings, the three countries would implement the plan - called a sequence agreement - on a retroactive basis. The WTO in July 2005 ordered the EU to drop its export subsidy policy by May 22 - a move that should normalise world sugar prices. "Although the EU said it has already ended its sugar subsidies, in practice the EU has provided a future plan to support its farm subsidies in the long run," an exporter said. The EU's subsidies have allowed its member states to sell sugar at lower-than-global prices, which has reduced opportunities for other exporting countries. Under the WTO order, the EU was given two options - cut back its quantity commitment level for sugar export subsidies to below 1.27 million tonnes a year, or reduce its financial support to below ¤499.1 million (Bt19 billion). However, the EU still subsidises more than 2.8 million tonnes of exports, the exporter said. The three countries are now collecting information to file a second petition to the WTO, requesting enforcement of the WTO's ruling, the Commerce Ministry source said. "There's a good chance we'll win the petition again as the EU has maintained its unfair practice despite the final ruling," she said. The final decision of the WTO will would help shore up sugar prices on the world market and enhance opportunities for Thai producers, she said. About one year would be needed to gather data as evidence for the second petition, she said. After this past May's deadline, the EU kept up its farm subsidy practice, claiming that it had to fill outstanding contracts, she said. "We need time to collect data to show that the EU is keeping its subsidy policy and should be blamed for hurting developing countries by undercutting their producers' prices," she said. In the dispute process, the odds of winning damages are less favourable than getting permission to hike tariffs, she said. Petchanet Pratruangkrai The Nation
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