European Communities—Export Subsidies on Sugar

WT/DS265, 266, 283/AB/R (May 19, 2005)

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European Communities—Export Subsidies on Sugar

World Trade Organization, Appellate Body
WT/DS265, 266, 283/AB/R (May 19, 2005)

JL

Facts

The European Communities (EC) (defendant) entered into the Agreement on Agriculture and agreed to reduce the export subsidies for sugar. The EC adopted a reduction-commitment schedule as part of the Agreement on Agriculture. The schedule reflected that overall sugar export subsidies would be reduced from 780 million pounds to 499 million pounds by 2000, and the subsidized export quantities would be reduced from 1.6 million tons to 1.27 million tons. The schedule included Footnote 1, which noted that the EC was not committing to reduce any budget outlays or export quantities for sugar of Indian or African-Caribbean-Pacific origin. Australia, Brazil, and Thailand (plaintiffs) challenged this exclusion from the EC’s reduction commitment and also challenged the subsidies that were being provided to type C sugar by the EC. The EC argued that no direct government subsidy was being provided for type C sugar. Australia, Brazil, and Thailand asserted that the Agreement on Agriculture required a reduction in export subsidies both in budget outlays and in export amounts, which required the reduction of all the exports. The General Agreement on Tariffs and Trade (GATT) Panel ruled against the EC, and the EC appealed to the World Trade Organization (WTO) Appellate Body.

Rule of Law

Issue

Holding and Reasoning ()

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