Arbitrator Appointed on EU Sugar Dispute

Deputy Prime Minister and Minister for Trade Mark Vaile today welcomed the appointment of an arbitrator to determine the maximum time the EU will be given to reduce its export subsidies on sugar.

The appointment of World Trade Organization Appellate Body member Mr A V Ganesan, follows a successful challenge by Australia, Brazil and Thailand to have the EU cut its sugar export subsidies.

"Because the Europeans were unwilling to agree through negotiations to cut sugar subsidies within a suitable period of time, as required under WTO rules, the period of time within which cuts will need to be made will now be determined by an arbitrator," Mr Vaile said.

"The WTO found that subsidised EU sugar exports must be reduced from an average of more than five million tonnes a year to 1.2735 million tonnes a year and that budgetary expenditure on such subsidies must be reduced to €499.1 million ($800 million) a year.

"The removal of up to four million tonnes of subsidised European sugar from the world market will make a significant difference to Australian sugar producers who compete on the world stage.

"Australia will be seeking the earliest possible implementation of the WTO findings."

The WTO Appellate Body handed down its report on EU sugar subsidies on 28 April with the decision formally adopted by the WTO's dispute settlement body on 19 May. The report of the arbitrator is expected to be handed down in November.

Contacts: Ministerial - 02 6277 7420, Departmental - 02 6261 1555