The São Paulo (Brazil) Union of Sugarcane Agro-industry (Unica) considers a real victory of the developing nations, the World Trade Organization’s (WTO) recognition of market distortions caused by the European policy on sugar export subsidies.
“The anachronic European sugar system has been definitively questioned, and we can start to celebrate the beginning of the real process of liberalization of the protected sugar world market,” said Unica’s President, Eduardo Pereira de Carvalho, on official note, yesterday.
Brazil, Australia, and Thailand defended at a WTO settlement panel, in July 2003, after failed negotiations with the European Union (EU), that the European sugar export subsidies hurt existing multilateral trade treaties.
According to Unica, subsidies make competition unfeasible, since production of refined sugar costs more than US$ 700 per ton, and current prices practiced in London’s future market don’t reach US$ 260/ton.
Because of sugar subsidies, the EU has become the second largest world exporter of sugar, occupying the places of producers such as Brazil, Australia, and Thailand. Unica calculates that Brazil loses US$ 400 million per year due to European bloc’s subsidies policy.
According to the entity’s president, by accepting the demands of Brazil, Australia, and Thailand, the WTO reinforces the proposal for negotiations at the Doha Round.
Furthermore, the decision represents an additional encouragement for the EU to reform its sugar system, extremely protected and considered unsustainable even by its own authorities.
Unica stresses that the negotiation process at the WTO required concentrated efforts by both Brazilian diplomatic authorities and the private sector, represented by Unica – that, according to its official note, took care of all expenses with attorneys and technical consulting.
“These were our best efforts. We invested large financial resources on this battle, and it has been worth it. We are showing to the world, with the support of the Brazilian diplomacy headed by Minister Celso Amorim, that it is not possible to maintain a world economy where free trade rules only apply to sectors dominated by developed countries.”