The European Commission has announced that it will appeal a ruling by the World Trade Organisation (WTO) that the EU has been exporting more sugar with export subsidies than it is allowed to do under a WTO agreement.

"We are dissatisfied with this ruling and will appeal it. But the EU's appeal will not prevent the EU to plough on with a radical overhaul of its sugar regime. This reform is necessary for internal reasons. It will make the EU sugar sector more competitive and trade friendly," said EU Agricultural Commissioner Franz Fischler.

"The WTO decision calls into question the texts and commitments unanimously agreed upon by all WTO Members during the Uruguay Round. The EU will abide by its international obligations. But at the same time we will defend the legitimate interests of EU sugar producers and the preferential access enjoyed by developing countries into the EU," added EU Trade Commissioner Pascal Lamy.

In the dispute brought by Australia, Brazil and Thailand against the EU sugar regime, the three countries are challenging two types of EU exports of sugar as being allegedly subsidised contrary to the WTO Agreement.