Brazil’s Ministry of Foreign Relations has commented on the World Trade Organization’s (WTO) final decision confirming that subsidies granted by the European Union (EU) for the production and export of sugar violate international trade rules.
The European bloc can still appeal the decision, but it will be difficult to reverse the ruling on the grievance filed by Brazil, Australia, and Thailand.
The three countries protested to the WTO about EU subsidies to beet and cane sugar and sugar exports from ex-colonies in Africa, the Caribbean, and the Pacific. They argued that these practices have led to distortions on the world sugar market.
According to rough estimates, Brazil, which is the world’s largest sugar producer, accounting for approximately 16% of the market, suffers an annual loss of around US$ 400 million as a result of the EU’s sugar subsidy system, which transformed the European bloc into the world’s second largest exporter of this product.
In its preliminary finding, announced August 4, the WTO’s Dispute Settlement Body judged as appropriate the argument that the subsidies granted by the European bloc exceed limits established in previous trade agreements. This decision was just confirmed by the WTO.
This is Brazil’s second victory in a WTO panel (arbitration committee). The first, in April, involved US cotton subsidies.
Reporter: Maurício Cardoso
Translator: David Silberstein