Thursday 9th Jul, 2020

Australia launches WTO action against Indian sugar

Queensland’s sugar mills have produced more than two million tonnes of raw sugar this season, according to the Australian Sugar Milling Council (ASMC).
Photo: Shutterstock

Australia and Brazil have launched a formal World Trade Organisation (WTO) action against India.

The move aims to counter India’s continuing sugar subsidies, which are depressing world prices and impacting Australia’s sugar industry.

Minister for Trade, Tourism and Investment Simon Birmingham said India’s sugar subsidy regime was inconsistent with WTO rules and had helped create a glut in the global sugar market.

“This glut is hurting Australia’s canegrowers and millers, and is threatening our $1.8 billion sugar export industry by dragging down prices to unsustainable lows,” Birmingham said.

“While Australia respects the rights of WTO members to support their farmers and agricultural industries, this support must be consistent with WTO rules and provide a level playing field.

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“Unfortunately, our representations, and those of other sugar exporting countries, have so far been unsuccessful. This has left us with no other choice but to initiate formal WTO dispute action, together with Brazil,” he said.

Minister for Agriculture David Littleproud said the Australian sugar industry relies heavily on exports, sending roughly 85 per cent of its raw sugar into the world market.

“These subsidies are hitting our farmers and millers, and I’m pleased we’re exercising our WTO rights and asking for an even playing field,” he said.

Australian Sugar Milling Council CEO David Pietsch said the high volumes of Indian sugar produces in recent years are embedded and structural, meaning their industry will continue to flood the market unless subsidies and support mechanisms are fundamentally reformed.

“The analysis we jointly developed with government paints a strong case against Indian sugar support mechanisms. India’s sugar subsidies are a clear breach of its WTO obligations,” he said.

Last November, the WTO Committee for Agriculture met in Geneva, which saw 13 countries supporting the counter-notification lodged by Australia against India.

“The counter-notification, an important precursor to launching the formal WTO dispute settlement process, was essential to garner support for further action from other trading nations,” Pietsch said.

“We applaud Australian Trade Minister, Simon Birmingham’s tenacity and willingness to take the lead and coordinate an international response to uphold global trade rules.”