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European Union defends sugar policy in face of WTO challenges
BRUSSELS (September 28 2002) : The European Union leapt to the defence of its sugar regime on Friday after Australia and Brazil took formal steps to challenge the bloc's subsidy policies in the World Trade Organisation (WTO).
Earlier, the two countries - both major producers of cane sugar - confirmed they were issuing complaints to the global commerce watchdog about EU sugar rules and subsidies, which they blame for driving world prices below production costs.
"It's a fact that they are attacking this (sugar policy) and we defend it.
When you
are attacked, you defend yourself," EU Trade Commissioner Pascal Lamy told reporters.
Brazil, the world's largest sugar producer, says EU export subsidies
prevent it from competing on world markets and has asked for consultations
at the WTO with the 15-nation bloc.
Australia confirmed its intention to request consultations, the first step in the formal WTO dispute process, saying it hoped for the first round of talks within the next month or so.
If consultations do not produce a solution within 60 days, the complainant can ask for the creation of a WTO disputes panel.
A panel ruling can take months and is subject to appeal. "We regret this, we don't think this is a proper way forward," said Gregor Kreuzhuber, official spokesman for EU Farm Commissioner Franz
Fischler. "If you have a case, you go to the WTO. If you don't have a case, you don't. It's very simple."
"I don't really see that this would contribute a constructive climate, also in light of the WTO Doha round," he told reporters at the European Commission's daily news briefing, referring to the new round of global trade talks launched in Qatar last year.
Brazil and Australia were irritated that sugar was not included in Fischler's radical blueprint in July to reform EU farm policy, to be discussed by member states in coming months.
"The EU's reforms to the Common Agricultural Policy have not included the EU sugar regime.
This WTO action will force the EU to consider the interests of other sugar producers," Australia's Trade Minister Mark Vaile said in a statement.
The EU grants subsidies to its member states to export some 3.6 million tonnes of sugar a year and has come under fire for years from critics who say its policies distort world markets and act against the interests of developing countries.
Answering accusations that EU subsides were to blame for dragging down world prices, Kreuzhuber said: "The facts are exactly the opposite.
If you look at the European Union sugar production and exports in the last year, they have remained completely stable whereas prices have gone up and down." "This is a clear sign that you can't blame the European Union for price fluctuations which are dependent on many other world market factors," he said.
While Brussels insists that it is not violating global trade rules, it recognises some difficulties with its sugar regime and says the current system may become unsustainable.
Two studies with reform recommendations will be considered early next year.
It also says its sugar policy helps farmers in the Third World, despite repeated claims from development agencies that the EU's consumers and taxpayers are effectively paying to destroy livelihoods in some of the world's poorest nations.
Countries such as Sudan, Burkina Faso, Ethiopia and Mozambique exported sugar to the EU for the first time in 2001/02 as a result of the bloc's Everything But Arms (EBA) initiative, adopted in September 2000 to liberalise EU imports of all products except arms from the least developed countries.
As the world's largest sugar importer, the EU bought more than 900 million euros of sugar in imports during 2000. Of this, around 860 million euros was imported from developing countries at zero or very low tariffs, according to EU data.
"We are not a complete fortress. We are importing more sugar, especially from developing countries, than Australia, the United States, Japan and Canada put together," Kreuzhuber said.
Courtesy Business Recorder
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