./.  WORLD TRADE  
ORGANIZATION  WT/DS265/25 
WT/DS266/25 
WT/DS283/6 
13 January 2005 
 
 (05-0190) 
 Original:   English 
 
 
 
EUROPEAN COMMUNITIES – EX PORT SUBSIDIES ON SUGAR 
 
Notification of an Appeal by the European Communities  
under paragraph 4 of Article 16 of the Understanding on Rules  
and Procedures Governing the Settlement of Disputes (DSU)  
   The following notification, dated 13 January  2005, from the Permanent Delegation of the 
European Commission, is being circulated to Members. 
 
_______________ 
 
Pursuant to Article 16 of the Understanding on Rules and Procedu res Governing the Settlement of 
Disputes  ("DSU") and Rule 20 of the Working Pro cedures for Appellate review, the European 
Communities ("EC") hereby notifies its decision to a ppeal to the Appellate Bo dy certain issues of  
law covered in the reports of the Panel established in response to the requests from Australia, Brazil 
and Thailand in the disputes European Communities – Export Subsidies on Sugar  (WT/DS265/R, 
WT/DS266/R and WT/DS283/R).  
The European Communities seeks review of: 
 
 1) The conclusion, and the related legal findings and interpretations, contained in 
paragraphs 7.12-7.16 and 7.24-7.37 of the Pa nel reports, that the alleged "payments" 
in the form of sales of C beet were within the terms of reference of the Panel. 
 
 2) The conclusion, and the related legal findi ngs and interpretations set out in paragraphs 
7.120 to 7.222, 7.235 to 7.238 and 8.1(a), (b) and (c) of the Panel reports that Footnote 1 to Section II, Part IV of the EC 's Schedule has no legal effect and that, as a 
consequence, the EC's quantity commitment level for exports of  sugar is 1,273,500 
tonnes and the EC's budgetary outlay commi tments is €499.1 million from marketing 
year 2000/2001.  
 
 This conclusion is based on the following erroneous findings: 
 
-  that Articles 3.3 and 8 of the Agreement on Agriculture require in all 
circumstances that a Member specify both budgetary and quantity 
commitments; 
 -  that Footnote 1 to Section II, Part IV of the EC's Schedule is not a 
commitment limiting subsidisation, and does not cover exports equivalent to 
the volume of ACP/India sugar imported into the EC;  
 WT/DS265/25 
WT/DS266/25 WT/DS283/6 
Page 2 
  
- that even if Footnote 1 to Section II, Part IV of the EC's Schedule is a 
commitment limiting subsidisation it w ould remain inconsistent with the 
Agreement on Agriculture ; and 
- that the jurisprudence of US – Sugar Headnote applies to export subsidy 
commitments 
 3) The conclusion, and the related lega l findings and interpretations, set out in 
paragraphs 7.251-7335 and 8.1(f) of the Pane l reports, that exports of C sugar benefit 
from export subsidies falling within Article 9.1(c) of the Agreement on Agriculture . 
 
This conclusion is based on the following erroneous findings: 
 - that so-called "cross-subsidization" constitutes a payment on the exports of C 
sugar, which provides an export subsidy within the meaning of Article 9.1(c); 
 
- that the supply of C beet is a paymen t on the exports of C sugar financed by 
virtue of Government action, which provides an export subsidy within the meaning of Article 9.1(c). 
 
 4) The overall conclusion, and the related le gal findings and interpretations set out in 
paragraphs 7.336-7.340, 8.2 and 8.3 of the Pa nel reports, that the EC exported sugar 
in excess of its commitment levels in marketing year 2000/2001 and, therefore, has acted inconsistently with Articles 3.3 and 8 of the Agreement on Agriculture. 
 
 This conclusion is based on the erroneous conclusions mentioned above under 1), 2) 
and 3). 
 
 5) The conclusion, and the related lega l findings and interpretations, set out in 
paragraphs 7.61-7.75 and 7.348-7.354 of th e Panel reports, that, by claiming that 
exports of C sugar were in excess of the EC's commitment levels the Complainants 
did not act inconsistently with Article 3.10 DSU and the principle of good faith. 
 
 6) The conclusion, and the related lega l findings and interpretations, set out in 
paragraphs 7.366-7.374 and 8.4 of the Pane l Reports that the alleged violations 
resulting from the exports of C sugar nullif y or impair benefits accrued to the 
Complainants under the Agreement on Agriculture .  
 
The provisions of the covered agreements which th e European Communities consider to have been 
erroneously interpreted or a pplied by the Panel include: 
 
• Section II, Part IV of the EC's Schedule; 
• Articles 3.3,  8  and 9.1 of the Agreement on Agriculture ;  
• Articles 3.7, 3.8, 3.10, 6.2, 7.1, 7.2, 9.2, 11 and 12.7 of the DSU. 
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