THAILAND – SUBSIDIES ON SUGAR REQUEST FOR CONSULTATIONS BY BRAZIL
Document: REQUEST FOR CONSULTATIONS BY
Date: 7 April 2016
Document codes: WT/DS507/1; G/L/1146; G/SCM/D110/1; G/AG/GEN/131
Complainant: Brazil
Respondent: Thailand
Dispute stage: Consultation
Agreements cited: Art. 3.2, 3.3, 6.3, 8, 9.1, 10.1  AgricultureArt. 3.1(a), 3.2, 5(c), 6.3  Subsidies and Countervailing Measures (SCM)

THAILAND – SUBSIDIES ON SUGAR
REQUEST FOR CONSULTATIONS BY BRAZIL
The following communication, dated 4 April 2016, from the delegation of Brazil to the delegation of
Thailand and to the Chairperson of the Dispute Se ttlement Body, is circulated in accordance with
Article 4.4 of the DSU.

My authorities have instructed me to request consultations with the Kingdom of Thailand
("Thailand") pursuant to Articles 1 and 4 of th e Understanding on Rules and Procedures Governing
the Settlement of Disputes ("DSU"), Article XXII: 1 of the General Agreement on Tariffs and Trade
1994 ("GATT 1994"), Article 19 of the Agreement on Agriculture, and Articles 4, 7, and 30 of the
Agreement on Subsidies and Countervailing Measures ("SCM Agreement") concerning the subsidies
provided by Thailand to the sugar sector.

By means of its sugar regime, Thailand strictly controls virtually every aspect of its sugar sector,
including the production, storage, transport, sale, import, export, and other activities applicable to
cane, raw sugar, white sugar, molasses, and sugar by-products.

Thailand imposes a quota system that limits the quantity of sugar sold in the domestic market and
imposes price controls on ex-factory, wholesale, and retail sales of cane and sugar in the country.
Thailand's quota system guarantees a high price for the sugar produced for domestic consumption
(Quota A). Sugar produced in excess of this quota cannot be sold internally and must be exported
(Quotas B and C). Thailand's quota and price control system cross-subsidizes exports of Quota B
and Quota C sugar in a manner inconsistent with WTO rules. Moreover, Thailand supplements the
fixed prices for cane sales to sugar mills with additional payments to cane growers. Because
Thailand has not specified any export subsidy commitments in Section II of Part IV of its Schedule,
Brazil is of the view that Thailand's quota and price control system and its supplementary
payments to cane growers constitute export subsidies for sugar in violation of Thailand's
obligations under the Agreement on Agriculture.

Thailand also provides subsidies to convert substantial agriculture land from rice to cane
production and to develop additional capacity to manufacture cane into sugar. Thailand's domestic
support for cane and sugar in the form of price support, supplementary payments to cane growers,
and incentives to convert land used for rice production to cane production and to develop
additional capacity to manufacture cane into sugar exceeds the de minimis level. Because
Thailand's domestic support for the sugar sector alone exceeds its total AMS commitment level
specified in its Schedule, Thailand violates its obligations under the Agreement on Agriculture.

Thailand's quota and price control system, supplementary payments to cane growers, and
incentives to convert rice production to cane pr oduction and to develop additional capacity to
manufacture cane into sugar also constitute prohibited and actionable subsidies under the SCM
Agreement.

Brazil understands that Thailand's sugar regime is composed of a substantial number of laws,
regulations, policies, notices, and other measures applicable to Thailand's sugar sector. Relevant
legal instruments include, but are not limited to, the following, operating separately or collectively:
WT/DS507/1 • G/L/1146 • G/SCM/D110/1 • G/AG/GEN/131

1. The Cane and Sugar Act, B.E. 2527 (1984);
2. The Prices of Goods and Services Act, B.E. 2542 (1999);
3. Bank for Agricultural and Agricultural Cooperatives Act, B.E 2509 (1966);
4. Bank for Agriculture and Agricultural Co-operatives Act (No. 6), B.E. 2549 (2006);
5. The Agricultural Economics Act, B.E. 2522 (1979);
6. Export and Import of Goods Act, B.E. 2522 (1979); and
7. Export Standards Act No. 2, B.E. 2522 (1979).
Additional relevant measures are identified in the Annex to this request. The list is not exhaustive
and includes any amending, substituting, or implem enting measures, some of which are issued on
an annual basis or numerous times per year and may apply to one or more sugar growing
seasons. Brazil also understands that certain measures, although referenced in media reports and
in statements by government officials, are not publicly available.

Brazil considers that Thailand's sugar regime violates its obligations, inter alia, under the following
provisions of the Agreement on Agriculture and the Agreement on Subsidies and Countervailing
Measures:

1. Articles 3.3, 8, and 9.1 of the Agreement on Agriculture;
2. Article 10.1 of the Agreement on Agriculture;
3. Articles 3.2 and 6.3 of the Agreement on Agriculture;
4. Article 3.1(a) and 3.2 of the SCM Agreement; and
5. Articles 5(c) and 6.3 of the SCM Agreement.
In the Annex to this request for consultations and in accordance with Articles 4.2 and 7.2 of the
SCM Agreement, Brazil provides a list of regulations, documents, and statistical information that
constitute available evidence of the existence an d nature of the subsidies in question and the
serious prejudice to Brazil's interests.

Brazil reserves the right to raise additional clai ms and measures and address additional legal and
factual issues under other provisions of the covered agreements during the course of the
consultations.

My authorities look forward to receiving in due course the reply of Thailand to the present request
and to considering with Thailand a mutually convenient date and venue to hold consultations.

WT/DS507/1 • G/L/1146 • G/SCM/D110/1 • G/AG/GEN/131

ANNEX

Statement of Available Evidence in Accordance with
Articles 4.2 and 7.2 of the SCM Agreement

 Brazil's request for consultations dated 4 April 2016 identifies the subsidy measures that are
part of this request for consultations. The evid ence set out below is evidence presently available
to Brazil regarding the existence and nature of those subsidy measures and the serious prejudice
caused by them to the interests of Brazil. Brazil reserves the right to supplement or alter this list
in the future, as appropriate.

 The evidence presently available to Brazil includes, in addition to relevant measures
referenced in its request for consultations, the following:

 Notification of the Central Commission on Price of Goods and Services Re: Defining
Controlled Products (2003), Government Gazette (13 May 2003)
 Minutes of the Board Meeting No. 3/2548 held on 16 February 2005
 Regulation of the Cane and Sugar Board Re : Determination of the Rates of Fees on
Research and Promotion of Production of Cane and Sugar and Payment Method
B.E. 2549 (2006), Government Gazette (31 March 2006)
 Regulation of the Cane and Sugar Board Re: Rules, Procedures and Conditions regarding
the Permission to Export Sugar, B.E. 2550 (2007), Government Gazette
(16 February 2007)
 Regulation of the Cane and Sugar Board Re: Production, Packing, Storage Place, Survey,
Transport, Delivery of Sugar and Sale of Sugar for Consumption in the Kingdom,
B.E. 2550 (2007), Government Gazette (17 October 2007)
 Regulation of the Cane and Sugar Board Re: Determination of Quantity of Sugar for
Sugar Mills, B.E. 2550 (2007), Government Gazette (26 December 2007)
 Cabinet Resolution 0506/6371 Re: Remedy for suffering of cane growers and national
cane agenda (30 April 2008)
 Notification of the Cane and Sugar Board Re : Determination of Sale Price of Sugar for
Consumption in the Kingdom, Government Gazette (30 April 2008)
 Regulation of the Cane and Sugar Board Re: Rules, Procedures and Conditions on
Collection of the Money from the Sale of Sugar and Refined Sugar within the Kingdom to
the Cane and Sugar Fund B.E. 2551 (2008), Government Gazette (29 July 2008)
 Notification of the Cane and Sugar Board Re: Rules and Procedures regarding
Preparation of Estimation of Income, Dete rmination and Payment of Cane Price and
Sugar Production Cost and Remuneration Sharing Ratio between Cane Growers and
Sugar Mills B.E. 2553 (2010), Government Gazette (17 February 2010)
 USDA GAIN Report (TH0066) Thailand, Sugar Annual 2010 (9 April 2010)
 Secretary General Apichart Jongskul, Office of Agricultural Economics, "'Agricultural
Economics Crop Zoning in Thailand"' (12 December 2012)
 R i c h K e l l e r , " ' L a n d C o n v e r s i o n t o C a n e a n d L o w e r R i c e S u b s i d y , " ' A g P r o f e s s i o n a l
(12 August 2013)
 Notification of the Cane and Sugar Board Re: Determination of Preliminary Cane Price
and Preliminary Remuneration for Production and Sale of Sugar for Crop
Year 2013/2014, Government Gazette (25 December 2013)
WT/DS507/1 • G/L/1146 • G/SCM/D110/1 • G/AG/GEN/131

 Government of Thailand, "'PM Follows up on Agricultural Crops Situation and Zoning"'
(21 March 2014)
 Notification of the Cane and Sugar Board Re: Installment of the Sale of Quota A Sugar
for the Crop Year 2013/14 (21 November 2014)
 BAAC Annual Report FY 2013-2014
 Notification of the Cane and Sugar Board Re: Determination of Final Cane Price and Final
Remuneration for Production and Sale of Sugar for Crop Year 2013/2014, Government
Gazette (9 January 2015)
 Supunnabul Suwannakij, "'Thai Junta to Cut Rice Crop to Combat Glut as Reserves
Sold,"' Bloomberg Business (1 February 2015)
 Notification of the Central Commission on Price of Goods and Services Re: Determination
of Price and Rules, Conditions for the Sale of Sugar of 2015, Government Gazette (18
March 2015)
 USDA GAIN Report (TH5047) Thailand, Sugar Annual 2015 (9 April 2015)
 Antoine Meriot, "'Thailand's Sugar Policy: Government Drives Production and Export
Expansion"' (3 June 2015)
 Cabinet Resolution 0505/19314 Re: Assistance and remedy for suffering of cane growers
for the crop year 2014/2015 (4 June 2015)
 Notification of the Cane and Sugar Board Re : Determination of the Rates of Fees on
Research and Promotion of Production of Cane and Sugar for Crop Year 2014/2015,
Government Gazette (31 August 2015)
 USDA Grain/Feed Annual 2015
 "'Thailand Sugar Semi-Annual 2015."' USDA Fo reign Agricultural Service, GAIN Report
Number TH5120, 1 October 2015
 "'Sugar: World Markets and Trade"' USDA Foreign Agricultural Service, November 2015
 "'World and U.S. Sugar and Corn Sweetener Prices: Table 3b."' USDA Economic
Research Service, Sugar and Sweeteners Yearbook Tables, 4 January 2016