EUROPEAN COMMUNITIES – EXPORT SUBSIDIES ON SUGAR
Document: Implementation of DSB Recommendations and Rulings Communication from Australia, Brazil and Thailand
Date: 16 September 2005
Document codes: WT/DS265/32; WT/DS266/32; WT/DS283/13
Complainant: Thailand
Respondent: EU
Third parties: Australia, Barbados, Belize, Brazil, Canada, China, Colombia, Cuba, Fiji, Guyana, India, Jamaica, Kenya, Madagascar, Malawi, Mauritius, New Zealand, Paraguay, Saint Kitts and Nevis, Eswatini, Tanzania, Trinidad and Tobago, U.S., Côte d’Ivoire
Dispute stage: Appellate Body
Agreements cited: Art. 3.3, 8, 9.1, 10.1  AgricultureArt. 3.1, 3.2  Subsidies and Countervailing Measures (SCM)

EUROPEAN COMMUNITIES – EXPORT 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.

Rules and Procedures Governing the Settlement of Disputes (DSU), Australia, Brazil and Thailand
request the inclusion of the item " (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 approximately 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 prohibited 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.

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 functioning 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