GD/103

EEC - Refunds on Exports of Sugar - Complaint by Brazil

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Other titles

EC Sugar Exports (Brazil) (Source: GATT Analytical Index)

Parties

Complainant
Brazil
Respondent
EEC
EEC-9
Third Parties

Products at Issue

Products at issue
Sugar
Type of product
Agricultural
Product sub-type
Sugar and confectionary

Related disputes

GATT
Related GD
GD/102
WTO

Key legal aspects

Legal basis
  • GATT Article XXIII:1
Claims raised
  • GATT Article XVI:3
  • GATT Part IV
Defences raised
  • n.a.

Adjudicators

Type Panel
Chairperson P. Kaarlehto (Finland)
Other members Ki-Choo Lee (Korea), B. Eberhard (Switzerland), I. Parman (Turkey)

Report

Type Panel
Legal basis at issue
  • GATT Article XXIII:1
Claims at issue
  • GATT Article XVI:1
  • GATT Article XVI:3
  • GATT Article XXXVI
  • GATT Article XXXVIII
  • GATT Part IV
Defences at issue
  • n.a.
No of Pages (total / legal reasoning) 30 (and 18 annex)
  • -
  • Inconsistency found
  • No inconsistency found
  • Inconsistency found
  • Inconsistency found
  • Inconsistency found
  • -

Timeline

Request for consultations
  • (01/01/1978)
Request for establishment
Establishment
Composition
Report
Adoption of report

Outcome

Outcome of the proceedings
Report adopted
Additional Info L/5011 (07/10/1980) European Communities - Refunds on Exports of Sugar - Complaint by Brazil - Report of the Panel: The Panel was formed to examine and report on the complaint by Brazil over the refunds on exports of sugar granted or maintained by the EEC. Brazil argued that the application of the Community system of refunds on exports of sugar had resulted in:

(a) the EC having more than an equitable share of world export trade in sugar, in terms of GATT Article XVI:3;

(b) serious prejudice, and threat thereof, caused directly or indirectly to Brazilian interests in terms of GATT Article XVI:1; and

(c) impairment of benefits accruing to Brazil, directly or indirectly, under the General Agreement.

The parties agreed that the EC system for granting refunds on exports of sugar could be considered to be a form of subsidy subject to the provisions of Article XVI. In light of all the circumstances and evidence, and especially taking into account the difficulties in establishing clearly the causal relationships between the increase in Community exports, the developments of Brazilian sugar exports and other developments in the world sugar market, the Panel was unable to conclude that the increased share had resulted in the EC "having more than an equitable share of world export trade in the product", in terms of Article XVI:3. However, the Panel found that in view of the quantity of Community sugar made available for export with maximum refunds and the non-limited funds available to finance export refunds, the Community system of granting export refunds on sugar had been applied in a manner which in the particular market situation prevailing in 1978 and 1979, contributed to depress sugar prices in the world market, and that this constituted a serious prejudice to Brazilian interests, in terms of Article XVI:1. The Panel also concluded that the Community system and its application constituted a permanent source of uncertainty in world sugar markets and therefore constituted a threat of serious prejudice in terms of Article XVI:1.