28 Feb 2019: In an important escalation, the governments of Australia and Brazil have jointly launched a formal World Trade Organisation (WTO) action against the Indian government’s domestic sugar support mechanisms.
“A WTO dispute is a rare and significant escalation towards resolving a situation that’s been depressing the global sugar price and the earnings of Australian sugarcane growers and sugar millers,” said Paul Schembri, CANEGROWERS Chairman. “We thank the Australian Government for taking this step.”
Subsidised Indian sugar production and exports have rapidly become a major threat to the viability of cane growers and sugar millers in Australia and other unsubsidised sugar producers.
“We believe the high volumes of Indian sugar produced in recent years are embedded and structural, meaning their industry will continue to flood the global market unless the subsidies and associated support mechanisms are fundamentally reformed,” said David Pietsch, CEO at the Australian Sugar Milling Council (ASMC).
“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,” said Mr Pietsch.
Last November, the WTO Committee for Agriculture met in Geneva and 13 countries supported 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.
“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,” said Mr Pietsch.
“We had been hoping the Indian government would come to the table to find a negotiated solution rather than enter the more protracted formal proceedings, but this hasn’t happened,” said Mr Schembri.
“Other ways need to be found to support the well-being of India’s sugarcane growers, so that the global market can function efficiently and reward unsubsidised and efficient sugar producers including growers and millers in Australia,” he said.