The Australian government today [Friday] lodged a formal challenge with the World Trade Organisation over sugar subsidies paid in the European Union.

Trade Minister Mark Vaile said he was requesting dispute consultations, the initial step in the formal WTO dispute process, which would “allow Australia to question the EU over its sugar subsidy programme”.

The EU provides around €1bn (US$980m) a year in subsidies to its sugar industries. The subsidies include export subsidies on sugar and sugar products, as well as subsidies to EU sugar refiners.

Vaile was disappointed that the recent EU reform of its Common Agricultural Policy subsidies system did not address the sugar industry. “This WTO action will force the EU to consider the interests of other sugar producers,” he said in a statement, adding that Australia was liasing with Brazil, itself launching a challenge over EU subsidies.