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24 February, 2010

Should the European Union be allowed to export subsidized sugar?

In 2005, the World Trade Organization (WTO) set a limit to the EU`s yearly export of subsidized sugar of 1.37 million tonnes. Last week, five years later, the EU announced plans to export an extra 500.000 tonnes because of the extraordinarily high world sugar prices. Brazil, Australia and Thailand, respectively the worlds largest, 3rd and 4th largest sugar producers, have urged the bloc to respect the WTO quota, but Michael Mann, agriculture spokesman of the European Commission, stated that "the export limit doesn't apply" because the extra 500.000 tonnes are not subsidized. On the other hand it might be argued that the surplus sugar would not exist were it not for the EU subsidies.
But even assuming the sugar does indeed profit from EU subsidies, it might be morally right for the EU to breach the WTO agreement. As the commission stated: "With production below consumption and diminishing sugar stocks, sugar prices have risen to unprecedented levels, to the detriment of consumers in poorer countries”. Providing these poorer countries with cheaper sugar seems morally right. Then again, the limit to the export of subsidized sugar is aimed at protecting farmers in other poorer countries, such as Brazil and Thailand.
The motives of the EU are in this case questionable. Brazil`s sugarcane group Unica accuses the EU of "trying to externalize its surplus problems on world markets". If this is indeed the case, we are no longer dealing with a moral dilemma, but with a problem of moral motivation. Even if we assume that the EU is in fact exporting extra subsidized sugar to lower the price for the “poorer countries”, the question remains: What is more important; the income of Brazilian sugar farmers, or the purchasing power of consumers in poor countries?
I think the difficulty of this case stems from its different layers. The question is whether or not the EU should export the sugar. However, the question that lies underneath is whether the subsidies should have been there in the first place. The latter, as tempting as it is, is a different story; the sugar has already been produced; should it be sold? I believe that in this singular case, the sugar should be sold. The protection of Brazilian farmers should not limit the market to such a degree that the poorest countries suffer.

(http://news.bbc.co.uk/2/hi/8484826.stm)

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