India leaves an open door to new sugar dispute settlement

On January 25, India has left an open door to negotiate a dispute settlement with Brazil, Australia, and Guatemala over the subsidy query that has impacted the international sugar market and brought the country to be condemned by an investigation committee of the World Trade Organization (WTO).

The WTO’s panel decision was published in December, denouncing New Delhi’s massive subsidies to Indian sugar producers and the reintroduction of a floor price that caused production to exceed domestic demand. According to the WTO, the Indian government is required to change these policies in order to comply with international rules.

The dispute was part of yesterday’s agenda of the Dispute Settlement Body, led by the delegations of Brazil, Australia, and Guatemala, after India filed an appeal against the body’s decision – a formality that, in practice, prevents the three countries from winning.

Brazil, Australia, and Guatemala noted that the panel agreed with almost all grievances presented and expressed regret that India decided to submit an “appeal to the void” as the Appellate Body, which normally has seven judges, is currently empty because the United States has blocked the appointment of new arbitrators, leaving the case without a chance of being resolved in the near future.

On the 25th, Brazil once again complained at the WTO that the condemned policies cause harm to Brazilian sugar producers. The country also emphasized its discontentment with the fact that India issued an “appeal to the void” and reiterated its commitment to finding quickly a solution so that India may respect the panel’s decision.

The Indian delegation, for its part, criticized various legal aspects of the panel’s decision while maintaining an “open door” to negotiating a sugar dispute settlement. Now it’s just a matter of transitioning from rhetoric to actual negotiations.

The Indian government continues to be under strong pressure from the country’s sugar producers not to change the recently adopted minimum price policies that encourage supply, which is partly diverted to the international market and brings global sugar prices down. Indians have increased their share of the global sugar trade thanks to subsidies.

The Brazilian government has a provisional measure ready to go at the Chief of Staff Office (Casa Civil), in which the Executive can proportionately and unilaterally retaliate in cases of victories in disputes at the WTO, when the losing country submits a so-called “appeal to the void”, making India an obvious target.

Source: Valor Econômico

To read the full original article, visit the link:

https://valor.globo.com/agronegocios/noticia/2022/01/26/india-deixa-porta-aberta-para-um-acordo-na-disputa-do-acucar.ghtml

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