12 September 2005, 15:46  EU plan to unload 2m tonnes of sugar on market

The European Union is planning to push more than 2m tonnes of surplus sugar on to the world market in spite of a World Trade Organisation ruling that such exports are illegal. The proposal, which is likely to draw a strong rebuke from other sugar-producing countries, would sell sugar from the EU's internal stocks abroad to prevent domestic oversupply. The European Commission will make its recommendation this week that, according to officials, is likely to involve between 2m-2.5m tonnes of sugar, compared with annual EU production of about 17m tonnes. The proposal, set to be agreed this month, will go to representatives of the member states next week. Sugar has become one of the most hotly contested issues in international farm trade, with other sugar exporters arguing that the EU's sugar regime pushes down world prices and harms other farmers. The EU has always exported excess sugar, but the likely 2m tonne figure is 10 times the level in 2003 and more than twice the amount in 2002. Although European farmers do not receive direct export subsidies for sugar sold in this way, a WTO panel ruled last year that they were in effect cross-subsidised and hence broke WTO agreements. The Commission, which this year submitted reforms to member states cutting prices paid to sugar producers, argues that since it still has time to implement the WTO's ruling, the current plans do not violate the rules. Australia, Brazil and Thailand, three of the world's largest sugar exporters, who brought the case to the WTO, say that the plans would hurt their farmers further. “It seems unreasonable that having borne the brunt of 25 years of depressed sugar prices, in part because of EU subsidies, we also have to bear the cost of the transition,” said a senior Australian official. The EU's sugar regime has become a cause celebre among some developing countries and non-governmental organisations. “The EU should comply with the spirit of the WTO panel decision, not seek to exploit the last remaining loopholes,” said Amy Barry, spokesperson for Oxfam, who said “the timing could not be worse” ahead of a crucial ministerial meeting in Hong Kong this December to push forward global trade negotiations.

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