GENEVA/BRUSSELS, (Reuters):

BRUSSELS SAID yesterday it was weighing an appeal after the World Trade Organisation (WTO) again declared a big part of the European Union's (EU) multi-million-dollar sugar exports illegal.

In a final ruling in a dispute brought by Brazil, Australia and Thailand, WTO trade judges reiterated a verdict last month that the 25-nation bloc had exceeded limits on the export of subsidised sugar.

Critics say the EU depresses world sugar prices, costing poorer exporters hundreds of millions of dollars in lost income.

"As expected, the ruling has not changed," said a trade source with access to the confidential WTO verdict.

Officials said the bloc would probably contest the ruling, which declared around half its annual exports of more than 5.0 million tonnes were subsidised in violation of EU trade commitments.

DECISION EXPECTED

The WTO decision had been expected because so-called final rulings rarely make changes. But if Brussels opts to fight on, then it could be at least a year before the case concludes.

If it loses an appeal, the bloc must reform its policy, pay compensation to those bringing the complaint or face the possibility of them imposing sanctions.

It is the second time in recent months the WTO has rebuffed the giants of world trade ­ the EU and the United States ­ over their farm policies, with Washington fighting a guilty verdict in a cotton case, also brought by Brazil.

The results should strengthen the hand of developing countries which are demanding swingeing cuts to such subsidy programmes as part of negotiations at the WTO on reforming global commerce, including agriculture, analysts say.

LONG OVERDUE

"This ruling is a triumph for developing countries and a warning bell for rich countries who consistently flout the rules ... and whose unfair systems are creating misery and poverty for millions," said Phil Bloomer, head Oxfam International's Make Trade Fair campaign.

The WTO sugar ruling will not be made public for another month, but the contents have been widely leaked.

According to sources familiar with the case, the judges upheld the view of Brazil, the world's largest sugar exporter, and its allies that surplus EU production - so-called "C" sugar exported by the bloc - was subsidised.

They also ruled that some 1.6 million tonnes of sugar the EU buys from poor African, Caribbean and Pacific (ACP) producers at high prices - and which it then re-exports - had to be included when totting up the total for subsidised exports to see if it was under the ceiling.

ACP countries have expressed concern the ruling will deprive them of vital foreign earnings, but the WTO said there was nothing to stop Brussels continuing to buy the sugar.

The EU has already announced plans to reform its 35-year-old sugar regime, but analysts say it would have to do more to satisfy the WTO.

Back to Business

Go-Jamaica | Jamaica Star | Go-Local Jamaica | Sports Jamaica | Letters to the Editor