Are there implications for all sugar exporters exporting below costs of production?
Are we not “all sinners”? No. Exports below costs of production do not come within WTO definitions of an export subsidy. The fact that sugar exports are occasionally made at below costs of production (during times of low world prices) does not mean that such sales are cross-subsidised from domestic support prices. In the case of Australia, the domestic (ex-mill) price for raw sugar is set at export parity and around 80% of production is exported. It would be unsustainable for exports to be financed from domestic prices. Moreover, Australian producers selling into the domestic market are not protected against imports. Imports can enter duty free. In the case of ‘C’ sugar, the export of such sugar – which cannot be sold on the domestic market and which has been consistently sold at prices well below costs of production for over a decade – was found to benefit from an export subsidy because there was a payment on the export financed by virtue of governmental intervention. All three elemen
