This summary has been prepared by the Secretariat under its own responsibility. The summary is for general information only and is not intended to affect the rights and obligations of Members.
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Summary of the dispute to date
The summary below was up-to-date at
On 27 February 2019, Australia requested consultations with India concerning support allegedly provided by India in favour of producers of sugarcane and sugar (domestic support measures), as well as all export subsidies that India allegedly provides for sugar and sugarcane (export subsidy measures).
Australia claimed that the domestic support measures appear to be inconsistent with:
- Articles 3.2, 6.3 and 7.2(b) of the Agreement on Agriculture; and
- Article XVI of the GATT.
Australia claimed that the export subsidy measures appear to be inconsistent with:
- Articles 3.3, 8, 9.1, 10.1, 18.2, 18.3 of the Agreement on Agriculture;
- Articles 3 and 25 of the SCM Agreement; and
- Article XVI of the GATT.
Australia submitted, together with its consultations request, a statement of available evidence pursuant to Article 4.2 of the SCM Agreement.
On 11 March 2019, Guatemala requested to join the consultations. On 12 March 2019, Brazil, Costa Rica and the European Union requested to join the consultations. On 14 March 2019, Thailand requested to join the consultations.
Panel and Appellate Body proceedings
On 11 July 2019, Australia requested the establishment of a Panel. At its meeting on 22 July 2019, the DSB deferred the establishment of a panel.
At its meeting on 15 August 2019, the DSB established a panel. Brazil, Canada, China, Colombia, Costa Rica, El Salvador, the European Union, Guatemala, Honduras, Indonesia, Japan, Panama, the Russian Federation, Thailand and the United States reserved their third-party rights.
On 16 October 2019, Australia requested the Director-General to compose the panel. On 28 October 2019, the Director-General composed the panel.
On 27 April 2020, the Chair of the panels in DS579, DS580 and DS581 informed the DSB that, due to the complex procedural and factual nature of the disputes and in light of the harmonized timetables adopted to that date, the panels estimated to issue their final reports to the parties not before the second quarter of 2021. The Chair apprised the DSB that the report would be available to the public once it was circulated to the Members in all three official languages, and that the date of circulation depends on completion of translation.
This dispute concerns India's domestic support to sugarcane producers and export subsidies for sugar. Australia challenged:
- India's mandatory minimum prices for sugarcane (the Fair and Remunerative Price (FRP) and State-Advised Prices (SAPs)), as market price support within the meaning of the Agreement on Agriculture, as well as other payments and policies in favour of sugarcane producers, as non-exempt direct payments or other non-exempt policies within the meaning of the Agreement on Agriculture, and
- three assistance schemes, as WTO-inconsistent export subsidies, that operate in conjunction with India's Minimum Indicative Export Quotas (MIEQs) or Maximum Admissible Export Quantity (MAEQ), and an additional scheme that operates independently. Australia claimed that India's schemes constitute subsidies within the meaning of the Agreement on Agriculture, as well as subsidies contingent upon export performance within the meaning of the SCM Agreement.
Australia also claimed that by failing to notify its domestic support measures and export subsidies to the relevant WTO committees, India acted inconsistently with its notification obligations under the Agreement on Agriculture and SCM Agreement, or, alternatively, under the GATT 1994.
Regarding India's alleged domestic support to sugarcane producers, the Panel found that, for five consecutive sugar seasons, from 2014-15 to 2018-19, India provided non-exempt product-specific domestic support to sugarcane producers in excess of the permitted level of 10% of the total value of sugarcane production. Therefore, the Panel found that India is acting inconsistently with its obligations under Article 7.2(b) of the Agreement on Agriculture.
The threshold issue before the Panel was whether “market price support” within the meaning of the Agreement on Agriculture only exists when the government pays for or procures the relevant agricultural product. India argued that its mandatory minimum prices are not paid by the Central or State Governments but by sugar mills, and hence do not constitute market price support. The Panel found, however, that market price support does not require governments to purchase or procure the relevant agricultural product, and thus rejected India's argument.
Regarding India's alleged export subsidies for sugar, the Panel found that the challenged schemes are export subsidies within the meaning of Article 9.1(a) of the Agreement on Agriculture. Since India's WTO Schedule does not specify export subsidy reduction commitments with respect to sugar, the Panel found that such export subsidies are inconsistent with Articles 3.3 and 8 of the Agreement on Agriculture.
The Panel also found that under the four challenged schemes, India provides subsidies contingent upon export performance within the meaning of the SCM Agreement, inconsistently with its obligations under Articles 3.1(a) and 3.2 of the SCM Agreement. India argued that the “period of eight years” referred to in Article 27.2(b) of the SCM Agreement continued to exempt India from the application of the prohibition on export subsidies. This raised the question of whether this transition period began on the date of India's graduation from Annex VII(b) of the SCM Agreement or from the date of entry into force of the WTO Agreement. The Panel found that the eight-year transition period under Article 27.2(b) starts from the date of entry into force of the WTO Agreement, and concluded that this special and differential treatment provision did not apply to India.
The Panel recommended that India withdraw its prohibited subsidies within 120 days from the adoption of the Report, in accordance with Article 4.7 of the SCM Agreement. In the interim review process, India argued that, because Article 19 of the Agreement of Agriculture prevails over Article 4.7 of the SCM Agreement, the Panel should not recommend such a time period. The Panel nonetheless found that no conflict exists between the two provisions and did not reconsider the recommended time period of 120 days. In determining this particular period, the Panel took into consideration, inter alia, the impact of the COVID-19 pandemic on the functioning of the public sector in India.
Regarding notifications, the Panel found that Article 18.2 of the Agreement on Agriculture contains a mandatory obligation on Members to submit notifications, and that India violated this obligation by failing to notify its domestic support to sugarcane producers and export subsidies for sugar to the Committee on Agriculture. The Panel also found that, by failing to notify its export subsidies to the SCM Committee, India acted inconsistently with Articles 25.1 and 25.2 of the SCM Agreement.
On 24 December 2021, India notified the DSB of its decision to appeal to the Appellate Body certain issues of law and legal interpretations in the panel report. On 11 January 2022, Australia informed the DSB that it had taken note of India's notification of its appeal and that, given the current non-operational situation of the Appellate Body, it considered that all subsequent procedural deadlines set out in the Appellate Body's Working Procedures were suspended. Australia indicated that when the Appellate Body resumes its functions, it should set the schedule for this appeal. Australia indicated its intention to file a written submission and make an oral statement in accordance with the schedule to be determined by the Appellate Body. Australia noted its disagreement with India's appeal.
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