INTRODUCTION

This proceeding was initiated by three complaining parties, Australia, Brazil and Thailand.

In communications dated 27 September 2002, Australia and Brazil requested consultations with the European Communities pursuant to Article 4 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (“DSU”), Article XXII:1 of the General Agreement on Tariffs and Trade 1994 (“GATT 1994”), Article 19 of the Agreement on Agriculture, and Articles 4.1 and 30 of the Agreement on Subsidies and Countervailing Measures (“SCM Agreement”), with respect to export subsidies provided by the European Communities to its sugar industry. Australia and Brazil held consultations with the European Communities in Geneva on 21 and 22 November 2002 but these consultations did not result in a resolution of the dispute.

On 14 March 2003, pursuant to Article 4 of the DSU, Article XXIII of the GATT 1994, Article 19 of the Agreement on Agriculture, and Articles 4 and 30 of the SCM Agreement, Thailand requested consultations with the European Communities with respect to certain subsidies provided by the European Communities in the sugar sector. Consultations were held in Geneva on 8 April 2003 but failed to resolve the dispute.

On 21 July 2003, Australia, Brazil and Thailand requested the establishment of a panel pursuant to Articles 4.7 and 6 of the DSU and Article XXIII:2 of the GATT 1994.

At its meeting on 29 August 2003, the Dispute Settlement Body (DSB) established a panel pursuant to the requests of Australia (WT/DS265/21); Brazil (WT/DS266/21); and Thailand (WT/DS283/2), in accordance with Article 6 of the DSU. At that meeting, the parties to the dispute agreed to establish a single panel pursuant to Article 9.1 of the DSU with standard terms of reference.

Terms of reference

The terms of reference are the following: