Memorandum submitted by the World Trade
Organisation (O81)
As you are aware, Australia, Brazil and Thailand
have undertaken a dispute settlement proceeding against the European
Communities (EC) (WT/DS265, WT/DS266 and WT/DS283 which are publicly
available on the WTO website). Based on standard WTO procedures,
the Panel is requested to respond to the claims raised by the
complainants in their Panel requests. In their Panel requests,
the complainants claim that the EC sugar regime is inconsistent
with the EC's agriculture commitments under the WTO. In particular,
the complainants' claims are concerned with the following two
aspects of the EC sugar regime:
(i)
The EC sugar regime guarantees a high price for the
sugar that is produced within production quotas. This is termed
"A and B sugar". Sugar produced in excess of these quotas
is termed "C sugar". Sugar classified as C sugar cannot
be sold internally in the year in which it is produced, and must,
in principle, be exported. Payments in the form of high prices
provided to growers and processors by the EC sugar regime finance
the production and export of C sugar at prices below its total
cost of production.
(ii)
The EC grants export subsidies to an amount of white
sugar ostensibly equivalent to the quantity of raw sugar that
the EC imports under its preferential arrangements. This amount,
reportedly, is approximately 1.6 million tons.
According to the complainants, the EC unjustifiably
excludes these subsidies from the calculation of its total amount
of export subsidies that it provides for sugar. According to the
complainants, the amount of sugar thus subsidised, alone or in
combination with other export subsidies for sugar provided by
the EC, exceeds the export subsidy reduction commitment levels
of the EC and, as such, constitutes a violation of the EC's obligations
under Articles 3.3, 8, 9.1(a) and (c), or, alternatively, Article
10.1 of the Agreement on Agriculture. By granting export subsidies
within the meaning of Articles l.1(a)(1)(i) and (iv), 1.1(a)(2),
and 1.1(b) of the SCM Agreement which, according to the complainants,
are not permitted by the Agreement on Agriculture, the EC also
acts inconsistently with its obligations under Articles 3.1(a)
and 3.2 of the SCM Agreement that prohibit export subsidies.
Assuming a regular time-table, the Panel would
be expected to issue its Final Report to the parties by September
2004. This Panel report would then be translated (normally within
a month) and circulated to all WTO Members. Panel reports can
be appealed to the Appellate Body within 60 days of their circulation
to all Members. The Appellate Body is expected to issue its final
decision within 90 days from the date of an appeal.
20 April 2004
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