Sugar support against the rules

IN A PRELIMINARY ruling on Wednesday (August 4), the WTO found that subsidies paid under the EU sugar regime were in violation of global trade rules.

The WTO‘s disputes panel found that the EU was exporting four times the permitted amount of subsidised sugar on world markets each year, The Guardian reports.

According to The Financial Times, trade diplomats said the WTO tribunal had found that EU domestic support for sugar indirectly subsidised exports of surplus production and violated the EU‘s WTO commitment to limit export subsidies.

The ruling is expected to add impetus to recent proposals from the EU Commission for changes to the sugar regime.

The Times reports that the Commission is almost certain to appeal against the ruling. It is expected to argue that its recent proposals will bring the EU sugar regime in line with the WTO rules.

The case was brought by Brazil, Thailand and Australia, and the ruling is the second WTO victory for Brazil this year, after US subsidies to domestic cotton growers were deemed illegal in June in a case brought by Brazil.

Roberto Rodrigues, Brazil‘s agriculture minister, said the ruling meant that the EU would have to cease exporting 2m tonnes of sugar from next year.