WTO ruling turns up heat on Brussels sugar trade

Extra pressure has been put on EU agriculture ministers to reach an agreement on revamping the sugar regime when they meet in Brussels later this month.

Reform was made necessary by a World Trade Organisation ruling last May which said the EU was over-subsidising its sugar exports. As a result, the EU is having to rein in prices and cut output.

Brussels managers had expected they would be given until next August to come into line. But a WTO arbitrator has now decreed that the EU must start respecting its export limits from next May.

The EU Commission has always said it wanted an agreement on sugar reform in November.

This was to strengthen its hand going into the crucial trade talks in Hong Kong in December, but also to give it time to implement the new legislation before the existing EU sugar regime expires on 30 June, 2006.

The new deadline narrows this window, making a deal in the November farm council all the more important.

“Rapid adoption of the proposals would help the EU implement the arbitration ruling in a timely manner,” said a commission spokesman.

But EU farm ministers remain deeply divided and there is also mounting pressure from the EU parliament for the commission’s proposals to be watered down.

Australian trade minister Mark Vaile warned this week that if the EU did not respect the WTO ruling, he would take retaliatory action.