Sugar

*Main policy areas*	*Remarks*
*Tariff escalation*	Tariffs are particularly high for sugar beet. The EU and Other West Europe, respectively at 349 and 144, have the highest escalation rates.
*Tariff rate quota administration*	51 sugar TRQs notified to WTO in 1999; TRQ under-fill for some countries (both chronic and acute problems in fulfilling quota volumes); TRQs exercised in several countries (including Barbados, Colombia, Costa Rica, El Salvador, EU, Philippines, Guatemala, Hungary, Iceland, Malaysia, Mexico, Morocco, Nicaragua, Slovak Republic, South Africa, Thailand, Tunisia, United States and Venezuela); Most well known TRQs applied in EU and United States; Under the Everything but Arms (EBA) Agreement, Full liberalization will be phased out between 1 July 2006 and 1 July 2009 by gradually reducing the EU tariff to zero. In the meantime, LDC raw sugar can come duty free within the limits of a tariff quota; TRQs in the United States are used as policy instrument to restrict sugar imports to the extent needed meet United States sugar program objectives. In practice, the United States market access commitment made under WTO rules means that a minimum of 1256 million short tonnes (ST) of foreign sugar must be allowed to enter the domestic market each year. While the commitment sets a minimum import level, no other provision limits United States policymakers in allowing additional amounts of sugar to enter if needed to meet domestic demand. Under these rules, foreign sugar (including imports from Mexico under the NAFTA Agreement) enters under two TRQs: one for raw cane and the other for a small quantity of refined (including beet) sugar.
*Tariffs*	Overall, reductions in tariff levels for sugar were much smaller than for other agriculture products, with dairy the only other sector reviewed by WTO to show less reduction than sugar. Megatariffs on ex-quota imports are applied by EU and United States; Under the EBA trade Agreement, the full liberalisation of sugar will be phased in during a transition period. Duties on sugar will be reduced by 20 percent on 1 July 2006, by 50 percent on 1 July 2007, and by 80 percent on 1 July 2008, and eliminated at the latest by 1 July 2009; The amount of sugar entering the United States under each quota is subject to a zero or low duty. Sugar entering above each quota is subject to a tariff that declines over time according to the rate specified in the trade agreement.
*Amber box*	Market price support is applied in the US sugar program through loan price guarantees to beet processors/cane millers; Intervention price support is applied in EU sugar policy; Price support levels remain high, particularly for sensitive commodities such as sugar, despite commitments for reductions.
*Export subsidies*	There are 11 export subsidies commitments by WTO Member Countries; Nine countries plus EU committed to reductions in subsidised sugar exports (largest reduction commitments by EU, Mexico, Brazil and South Africa); EU did not make export subsidy commitments on the subsidised quantity of exports equal to its Special Preferential Sugar import quota (Sugar Protocol).
*Export credits*	There is no agreement in existence on use of export credits; Export credits for sugar are not extensively used as exports of sugar are generally limited by high taxes to ensure the internal market supply.
*State Trading Enterprises*	STEs still operate in several countries, mainly to regulate exports (Australia) or monitor both internal and external prices and trade (India and China); Lack of transparency in the policies applied by STEs remains an important issue in sector; A number of countries seeking accession to WTO use STEs to implement agricultural policies, including sugar.
*Export restrictions and prohibitions*	Not particularly relevant to sector.
*Food security*	Several developing countries have increased efforts to shield domestic industries from international competition; mostly through tariff measures, or price stabilization schemes utilizing a form of variable levy based on world market price (usually applied within bound rate); Also related to rural development and domestic consumption policies.
*Food safety*	Sanitary and Phytosanitary Measures (SPS measures), while important to sector, are typically not used as a technical barrier to trade as often as in other sectors; SPS Measures are not as important to sugar sector as most volume traded is for further processing, and refining process is a further purification of product (polarity).
*Rural development*	Sector is important for rural development in many developing countries, particularly the role of smallholders; For the Africa, Caribbean and Pacific (ACP) countries with preferential access to EU sugar market, sugar sector estimated to contribute 20 percent to GDP and employ 30 percent of labour force; Sugar sector contributes to development of rural infrastructure and provides social amenities (such as hospitals, schools, electricity, transportation).
*Green box*	Cost of drainage and irrigation borne by federal government in Australia; several countries challenged.
*Blue box*	Applies to EU direct aid payments.
*Special Agricultural Safeguard*	Special Safeguards invoked by many of the less efficient sugar producing countries during recent period of low world prices (notably for India, Philippines, US and EU); Under the “Everything but Arms” (EBA) Agreement, the EU will carefully monitor imports of sugar and apply safeguard measures if necessary to address serious difficulties to EU producers; Notifications on both import volume surge and price levels.