Sugar

:This article deals with sugar as food and as an important, widely traded commodity. The word also has other uses; see sugar (disambiguation).

Sugar economics

In many industrialized countries, sugar is among the most heavily subsidized agricultural products. The European Union, the United States, and Japan all maintain elevated price floors for sugar through subsidizing domestic production and imposing high tariffs on imports. In recent years, sugar prices in these countries have been three times the price on the international market.

Related Topics:
European Union - United States - Japan - Price floor

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In international trade bodies, especially the World Trade Organization, the "G20" countries led by Brazil have argued that because their cane sugar exports are essentially excluded from these sugar markets, they receive lower prices than they would under free trade. While both the European Union and United States maintain trade agreements whereby certain developing and least-developed countries (LDCs) can sell certain quantities of sugar into their markets, free of the usual import tariffs, countries outside these preferred trade regimes have complained that these arrangments violate the "most favored nation" principle of international trade.

Related Topics:
World Trade Organization - Free trade - Most favored nation

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In 2004, the WTO sided with a group of cane sugar exporting nations led by Brazil, and ruled that the EU sugar regime and the accompanying ACP-EU Sugar Protocol, whereby a group of African, Caribbean, and Pacific countries are given preferential access to the European sugar market, are illegal. In response, the European Commission proposed on 22 June 2005 to radically reform the EU sugar regime, cutting prices by 39% and eliminating all EU sugar exports. The African, Caribbean, Pacific and Least developed country sugar exporters have reacted with dismay to the EU sugar proposals, arguing for a fairer reform of the EU regime which would be pro-development and meaningful towards the achievement of the Millennium Development Goals.

Related Topics:
2004 - WTO - Brazil - Least developed country - Millennium Development Goals

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Small quantities of sugar, especially speciality grades of sugar, are sold as 'fair trade' commodities; these products are produced and sold with the understanding that a larger-than-usual fraction of the revenue supports small farmers in the developing world.

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