The Dispute Settlement Body of the WTO has released its report on the EU sugar regime on 15 October 2004.
It will be recalled that Australia, Brazil and Thailand has challenged the EU common market organisation for sugar and brought the case at the WTO. According to these countries, the EU was illegally subsidizing the export of sugar to the world market above its scheduled commitments (volume and financial outlay). Mauritius and other ACP countries joined the dispute as third parties.
The Panel said in its report that the EU violated its exports subsidies reduction commitments by exporting more sugar than it is authorised. The Panel also said that the EU provided export subsidies over the agreed schedules of commitments. The Panel therefore recommends that the EU brings its sugar regime in conformity with WTO rules. However, the Panel acknowledges the importance of the preferential access of developing to the EU market and has suggested the following in its report:
The Panel is aware of the concerns and interests expressed, in the context of these proceedings, by several developing countries, with regard to their continued preferential access to the EC market for their sugar exports.
Pursuant to Article 19.1 of the DSU, the Panel suggests that in bringing its exports of sugar into conformity with its obligations under Articles 3.3 and 8 of the Agreement on Agriculture, the European Communities consider measures to bring its production of sugar more into line with domestic consumption whilst fully respecting its international commitments with respect to imports, including its commitments to developing countries.
In this regard, the Panel notes the recent statement of the European Communities on 14 July 2004 that the European Communities "fully stands by its commitments to ACP countries and India" and that with the reform of its sugar regime, the ACP countries and India will "get a clear perspective, keep their import preferences and retain an attractive export market.