Sugar producers in a number of Caribbean countries have pledged to overturn a motion by Australia and Brazil that challenges preferential sugar quotas they benefit from with the European Union.
Australia and Brazil are requesting dispute consultations, the first step in the formal World Trade Organisation (WTO) dispute process, which would allow them to question the EU over its sugar subsidy programme. Caribbean sugar producers and their representatives fear that the challenge could disrupt the entire sugar regime, under which Fiji and other countries currently benefit from preferential prices and quotas to the EU.
The preferential agreement has been in place for 300 years, and producers in the Caribbean are determined to defend it despite the challenge that it constitutes unfair trade. The Sugar Association of the Caribbean said its trade quotas were justified in that they enabled local producers to compete on the world market. The association also pointed out that both Australia and Brazil heavily subside their sugar industries, reported Dow Jones.
Caribbean countries export nearly 430,000 tons of raw sugar to Europe, with Guyana and Jamaica accounting for more than half of the quota. The EU pays 21 cents per pound of cane sugar, compared to six cents on the depressed world market.