The world's three major sugar-exporting nations - Thailand, Brazil and Australia -recently expressed their opposition to the European Union's export subsidy on sugar, on the grounds that it affects prices and lowers other countries' export volume.
The three countries have agreed on the possible filing of a case to the World Trade Organization if the EU does not review its policy.
Deputy Commerce Minister Alongkorn Ponlaboot said in Davos, Switzerland, during an unofficial meeting of trade representatives to the WTO, that the countries were extremely concerned about the EU's decision to increase its export subsidy to 500,000 tonnes, as it could affect global sugar trading.
"The three countries have agreed to follow up the case and will seek tighter collaboration to oppose the EU's move to subsidise its sugar industry, as it would affect sugar trading," said Alongkorn.
Thawatchai Sophasatienphong, Thailand's permanent representative to the WTO, recently issued a joint statement with his Indian and Brazilian opposite numbers, expressing their concern over the EU's plan to increase its export-subsidy quota to 500,000 tonnes.
The joint move was aimed at pressuring the EU to review its decision, as the subsidy would lead to lower sugar prices in the world market, which would in turn hurt sugar-cane farmers in developing nations.
The WTO in July 2005 ordered the EU to drop its previous export-subsidy policy for sugar, a move that helped to normalise global prices. However, the recent increase in sugar prices has encouraged EU member states to start exporting again.
The EU's subsidies allow operators in its member states to sell sugar at below the global price, which has reduced opportunities for other exporting countries.
The issue is expected to be included in the WTO's next meeting on agriculture in March.
If the situation worsens, Thailand, Brazil and Australia may file a petition to the WTO, as such export subsidies are breaches of the WTO's regulations.
