Developing countries were last night celebrating victory over the world's two largest economic blocs after the WTO ruled against the European Union's sugar regime and the support given by the US to its cotton farmers.
The WTO upheld legal actions spearheaded by Brazil, pressuring Brussels and Washington to scale back the billions of euros and dollars spent annually on protecting their agricultural sectors.
Endorsing an interim judgement last month, the body that polices world trade found that the EU is exporting much more sugar than it agreed to and that the sugar is unfairly subsidized, encouraging overproduction and damaging producers in poor countries. The case was brought by Brazil, Australia and Thailand.
In a separate case, the US was ordered to withdraw some of its support programs for producers of cotton and other commodities, after a WTO panel ruled Washington used illegal export subsidies or domestic payments higher than permitted by WTO rules.
Brazil said it was pleased by the ruling and hoped the US would obey the decision. Washington said it would appeal against part of the WTO finding, while Brussels also expressed its unhappiness with the decision made in Geneva.
European commission spokes-man Gregor Kreuzhuber issued a terse statement indicating the EU's disappointment. "A decision on whether to appeal the panel report will be made in due course," he said.
Kreuzhuber noted that the commission last July proposed a "radical overhaul" intended to cut sugar exports and export refunds, "abolish intervention, reduce EU production and the internal sugar price."
Oxfam, the development charity, said Brussels had been found to be in the wrong and should stop dumping excess sugar. "This is about the EU breaking the law by dumping subsidized sugar on world markets," said Jo Leadbetter, head of the charity's Brussels office.
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