In addition, according to the EC’s Schedule for sugar and the agricultural notifications submitted by the EC to the WTO for marketing years 1995/1996 through 2000/2001, the EC provides export subsidies in excess of its commitments to approximately 1.6 million tons of sugar per year. The export subsidies provided by the EC (referred to in the EC Council Regulation (EC) No. 1260/2001 as “export refunds”) cover the difference between the world market price and the high prices in the Community for the products in question, thus enabling those products to be exported.
Brazil also believed that the EC sugar regime accords less favourable treatment to imported sugar and is thus in violation of Article III:4 of the GATT 1994.