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Australia seeks WTO ruling and intervention over Indian sugar subsidies

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Australia seeks WTO ruling and intervention over Indian sugar subsidies

The World Trade Organization (WTO) headquarters are pictured in Geneva
The World Trade Organization (WTO) headquarters are pictured in Geneva
Photo: Reuters/Denis Balibouse

Today, Australia’s WTO action against what it deems unfair Indian sugar farming subsidies will be discussed by the Organisation’s Committee on Agriculture.

Canberra claims that New Delhi has exceeded the allowable 10% subsidy limit almost tenfold, paying its farmers a subsidy of up to 99% since 2011.—the equivalent of some $11.8 billion. Subsidies push extra supply of sugar onto the global market, undercutting the price of Australian sugar in India and on the global market.

India’s lack of reporting of any subsidies since the WTO’s formation in 1995 has forced Australia to rely on its own investigations. Under-reporting and lack of enforcement by the WTO forms part of US President Donald Trump’s ongoing criticism of the organisation, a feeling shared by Australia.

Although India is anticipated to fight this case, it’s not expected to harm the bilateral relationship. The WTO can order India to stop its subsidies or allow Australia to impose counter-veiling subsidies. The final decision likely depends on the strength of Canberra’s self-commissioned evidence. Ultimately, Australia will likely increase efforts to reform the WTO in a bid to stamp out these kinds of subsidies in international trade.

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Photo: Tom Samuelsson/Government Offices

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