. /.  WORLD TRADE  
ORGANIZATION  WT/DS265/32 
WT/DS266/32 
WT/DS283/13 
16 September 2005 
 (05-4119) 
 Original:  English 
 
  
 
EUROPEAN COMMUNITIES – EX PORT SUBSIDIES ON SUGAR 
 
Implementation of DSB Recommendations and Rulings
 
 
Communication from Australia, Brazil and Thailand  
    
 The following communication, dated 15 Septembe r 2005,  from the delegations of Australia, 
Brazil and Thailand to the Chairman of the Dispute Settlement Body, is circulated at the request of 
those delegations.  
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1. In accordance with the provisions of Article 21.6, second sentence of the Understanding on 
Rules and Procedures Governing the Settlement of Disputes  (DSU), Australia, Brazil and Thailand 
request the inclusion of the item "European Communities – Export Subsidies on Sugar (WT/DS265, 
WT/DS266, WT/DS283):  Implementation of DSB recommendations and rulings" on the agenda for 
the scheduled meeting of the DSB on 27 September 2005.  It is requested that this letter be circulated 
to the WTO membership.  2. Australia, Brazil and Thailand are making this  request under the DSB surveillance provisions, 
following reports that the EC is contemplating action to declassify quota sugar to C sugar in the near 
future which would serve to increase its subsidised  exports of sugar to a level of some 6 million 
tonnes in excess of  the EC’s WTO export subsidy commitment s for sugar (i.e. the EC’s subsidised 
exports of sugar would total a pproximately 7.2 million tonnes). 
 3. Such action by the EC, which could take effe ct as early as this October, would serve to 
increase its subsidised sugar exports, and would be undertaken in the clear knowledge that exports of 
sugar in excess of the EC’s scheduled commitment levels constitute prohib ited export subsidies under 
the WTO Agreement on Agriculture.   
 4. Consistent with the DSB recommendations a nd rulings in this dispute of 19 May 2005 – 
which found that all EC sugar exports  are subsidised – the EC is required to take prompt steps to 
reduce its subsidised exports of sugar from an averag e of approximately 5 million tonnes a year to its 
scheduled commitment level of a maximum of 1.273 m illion tonnes.  It is also required to reduce its 
budgetary outlays on export subsidies for sugar from an estimated  €2 billion a year to its scheduled 
commitment level of a maximum of €499.1 million.     
 WT/DS265/32 
WT/DS266/32 WT/DS283/13 
Page 2 
  5. The EC’s WTO implementation period co mmenced on 19 May 2005.  The provisions of  
Article 21 of the  DSU do not confer a waiver on a WTO Member to suspend the application and 
observance of WTO obligations during a dispute’ s implementation period.  Arbitration under 
Article 21.3(c) of the DSU will establish the end-point of the implementation period, but the EC’s 
obligation to implement is extant from day one of that period.    6. Any decision by the EC serving to increase exports during its WTO implementation period would be highly damaging to the functioning of th e WTO dispute settlement system and is a matter 
requiring consideration by the DSB under the su rveillance authority accorded to the DSB under 
Article 21.6 of the DSU.  7. It would also be harmful to the interest s of other WTO sugar producing members, including 
many developing countries.  It would also appear  to be incompatible with the provisions of 
Article 21.2 of the DSU. 
 8. For the mentioned reasons, Australia, Brazil and Thailand strongly caution the EC against 
taking measures such as sugar declassification which would serve to undermine both the EC’s WTO obligations and the effective functioni ng of the Dispute Settlement Body. 
 
 
    
(signed) 
Bruce Gosper 
Ambassador 
Permanent Representative of 
Australia (signed) 
Luiz Felipe de Seixas Corrêa 
Ambassador 
Permanent Representative of  
Brazil (signed) 
Poldej Worachat 
Chargé d’Affaires a.i.  
Permanent Mission of Thailand 
to the WTO 
 
 
  
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