The European Union will appeal against a ruling by the World Trade Organisation (WTO) which said EU subsidies for sugar production broke international trade rules, French Agriculture Minister Herve Gaymard said in Mauritius on Saturday.
"A number of countries launched an attack before the WTO against the privileged relationship that exists between Mauritius and certain African, Caribbean and Pacific nations, and the European Union," Gaymard said during a visit to the sugar-producing Indian Ocean island state.
"We lost the first round. We are going to appeal against the conclusions in the next few days and should know the outcome by next spring," he said.
Australia, Brazil - the world's biggest producer and exporter of sugar - and Thailand in August last year brought a complaint before the WTO against preferential treatment given by the EU to sugar growers from African, Caribbean and Pacific (ACP) countries and India.
The three countries also slammed a system of production and export subsidies for EU sugar farmers, arguing that these were more invidious than any EU preferential help given to sugar producers in ACP countries. Brazilian sugar producers say that European sugar subsidies represent a loss of some 400 million dollars (320 million euros) a year to them.
"We must draw conclusions from this ruling which runs parallel to the reforms to the sugar market which the European Commission announced in July," said Gaymard.
Then, Agriculture Commissioner Franz Fischler proposed that the EU, from July 2005, bring down its guaranteed prices and quotas for European sugar producers.
The EU would continue to reserve preferential terms for sugar exports from developing countries in the African, Caribbean and Pacific (ACP) group. EU countries are major players on the world sugar production market, although critics argue that the subsidies and quotas have left European producers immune to global competition to the detriment of poorer nations.