« EU loses a landmark sugar case at the WTO », by SAPA-AP & Blomberg, business Report, 29 April 2005

Résumé du document

Trading of agricultural products is on the increasing in the global market. In a quite a few countries (mainly third world countries), agriculture is the dominant sector of the economy and plays a very important role. To control the trade of agricultural products and to limit unfair practices, international negotiations have been set up. After the creation of the World Trade Organisation (WTO), the Agreement on Agriculture had been affirmed with a set of governing rules and regulations. The main objective of that agreement was to limit domestic support, export subsidies and to give a better access to market. In 2002, European Union was accused by Brazil (followed by Australia and Thailand) of not following these rules in the sugar market. Indeed, the European Union promotes its own products through its subsidies, which distorts the market. The WTO concludes that European Union is in violation with the Agreement on Agriculture and has to stop such practices before 2007.

Extraits

[...] The agreement does allow governments to support their rural economies, but preferably through policies that cause less distortion to trade. It also allows some flexibility on the manner commitments are implemented. The agreement plans a special treatment for developing countries, including an improvement of possibilities and modalities of access for the agricultural products presenting particular interests for the members. Developing countries do not have to cut their subsidies or lower their tariffs as much as developed countries, and they have more time to compete their obligations. [...]

[...] In the first part of that paper, I will describe the Agricultural Industry, showing its evolutions and the creation of the Agreement on Agriculture by the WTO. In the second part I will explain the sugar case, showing the complaint against European Union, the WTO decisions and finally the consequences of that case. The Agricultural Industry The trade of agricultural products During the past decades, global exportation of agricultural products increased a lot. But that growth was slower than the growth of manufactured products. [...]

[...] Conclusion Finally, European Union has lost a landmark sugar case at the WTO. This example shows that in spite of the international agreements signed between countries, many of them (often the richest ones) still be attracted by unfair practices and try to take advantages from the market. That case had a very positive aspect for the future of the global trade. It showed that thanks to that regulation, poor countries can act against rich ones (European Union, United States ) and they can win. [...]

[...] In general, this comity meets 4 times a year, but if needed, exceptional meetings can be organised. Sugar case European Union is accused by some countries not to respect the WTO rules in the sugar industry. Sugar is one of the European Union's most heavily subsidized crops, and the government supports have helped European sugar producers become the second-largest exporters in the world, behind Brazil, which is also the largest sugar producer. Why these countries are complaining for? a. The complaint European Union is accused of distorting the world sugar market, which remains unfair. [...]

[...] These 3 countries are the 3 biggest sugar exporters in the world. They argued that the almost billion in annual export subsidies that the European Union pays its sugar farmers is a cause of overproduction and artificially depress prices on the world sugar market. Sugar prices within the European Union market are about 3 times the price of sugar on the world market. The sugar exported is so much subsidised that Brazil (the world's largest producer of sugar) can hardly compete. [...]