WORLD TRADE
ORGANIZATIONWT/DS283/1
G/L/613G/AG/GEN/58
G/SCM/D53/1
20 March 2003
(03-1622)
Original:  English
EUROPEAN COMMUNITIES – EXPORT SUBSIDIES ON SUGAR
Request for Consultations by Thailand
The following communication, dated 14 March 2003, from the Permanent Mission of
Thailand  to the Permanent Delegation of the European Commission and to the Chairman of the
Dispute Settlement Body, is circulated in accordance with Article 4.4 of the DSU.
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Upon instruction from the Royal Thai Government, I have the honour to request consultations
with the European Communities (the "EC") pursuant  to Article 4 of the Understanding on Rules and
Procedures Governing the Settlement of Disputes (the "DSU"), Article XXIII  of the General
Agreement on Tariffs and Trade 1994 (the "GATT"), Article 19 of the Agreement on Agriculture, and
Articles 4 and  30 of the Agreement on Subsidies and Countervailing Measures (the "SCM
Agreement") with respect to certain subsidie s provided by the EC in the sugar sector.
The measures on which Thailand seeks consultations are the subsidies for sugar and sugar-
containing products, including cane or beet sugar and chemically pure sucrose in solid form, molasses
resulting from the extraction or refining of sugar, isoglucose, insulin syrup and the other productslisted in Article 1 of Council Regulation (EC) No. 1260/2001 of 19 June 2001 on the European
Communities' common organization of the markets in the sugar sector, published in the Official
Journal of the European Communities on 30 June 2001 (L178/1-45).  The above products will be
referred to below as "sugar".  The subsidies for sugar are accorded under the above Council
Regulation and under other related EC legislation, regulations, administrative policies and otherinstruments applicable to sugar and sugar-containing products,  including the rules adopted pursuant to
the procedure referred to in Article 42(2) of C ouncil Regulation (EC) No. 1260/2001 of 19 June 2001,
and any other provision related thereto.  These various legal instruments will be referred to below as
the "EC sugar regime".
The principal concerns of Thailand are the following:
• Under the EC sugar regime, only sugar manufactured from beet or cane harvested in the EC
but not sugar imported into EC benefits from a guaranteed high intervention price.  The ECsugar regime therefore accords imported sugar trea tment less favourable than that accorded to
domestic sugar and provides for subsidies contingent upon the use of domestic over importedgoods.
• Under the EC sugar regime, the EC accords export subsidies above its reduction commitment
levels specified in Section II of Part IV of its Schedule of Concessions. Under the EC sugar
regime, sugar that is produced within certain production quotas ("A" and "B" quotas) isWT/DS283/1, G/L/613,
G/AG/GEN/58, G/ SCM/D53/1
Page 2
guaranteed a high intervention price.  Sugar produced in excess of these quotas, referred to as
"C sugar", may not be sold internally in the year in which it is produced:  it must be exported
or carried over to fulfil the following year's production quotas.  By virtue of the EC sugar
regime, exporters of C sugar are able to export such sugar at prices below their cost ofproduction.
• In addition to the sugar produced in excess of production quotas, sugar of an amount of
approximately 1.6 million tons per year benefits from export subsidies.  These exportsubsidies, which are referred to in the EC Council Regulation (EC) No. 1260/ 2001 as "export
refunds", cover the difference between the world market price and the high prices in the
Community for the products in question, thus making it possible for those products to be
exported.
Thailand considers that the above subsidies are inconsistent with the EC's obligations under
Article III:4 of the GATT 1994, Articles 3.1(a), 3.1(b) and 3.2 of the SCM Agreement and
Articles 3.3, 8, 9:1 and 10.1 of the Agreement on Agriculture.  Thailand reserves its right to raise
other factual and legal issues during the course of the consultations.
In accordance with Article 4.2 of the SCM Agreement, Thailand attaches a "Statement of
Available Evidence" to this request.
I look forward to receiving your reply to this request and to set a mutually acceptable date to
hold consultations.WT/DS283/1, G/L/613,
G/AG/GEN/58, G/ SCM/D53/1
Page 3
Statement of Available Evidence
in Accordance with Articl e 4.2 of the SCM Agreement
Section II of Part IV of Schedule CXL-European Communities;
Council Regulation (EC) No. 1260/2001 of 19 June 2001  on the European Communities' common
organization of the markets in the sugar sector, published in the Official Journal of the European
Communities on 30 June 2001 (L 178/1-45)
Commission Regulation (EC) No 1520/2000 of 13 July 2000 laying down common detailed rules for
the application of the system of granting export refunds on certain agricultural products exported in
the form of goods not covered by Annex 1 to the Tr eaty, and the criteria for fixing the amount of such
refunds (L177/1-48)
Commission Regulations adopted pursuant to Council Regulation (EC) No. 1260/2001 of
19 June 2001
Agricultural notifications concerning export subsidy commitments (ES:1 to ES:3) submitted by the
EC to the WTO for marketing years 1995/ 1996 through 2000/2001: G/AG/ N/EEC/5, 11, 20, 23, 32
and 36
Agricultural notifications concerning domestic support commitments (DS:1 and supporting tables)
submitted by the EC to the WTO for marketing years 1995/1996 through 1998/1999:
G/AG/N/EEC/12, 16, 26 and 30
EC Court of Auditors, Special Report No 20/ 2000 concerning the management of the common
organisation of the market for sugar, together with the Commission's replies
Netherlands Economic Institute (NEI) report entitled Evaluation of the Common Organisation of the
Markets in the Sugar Sector
Organisation for Economic Co-operation and Development (OECD) report entitled Background
Information on Selected Policy Issues in the Sugar Sector
AGR/CA/APM(2001)32/FINAL 7 JUNE 2002
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