News in brief:
– Thailand and Brazil reach a landmark resolution at WTO, ending an eight-year dispute over the Thai government’s subsidies to sugarcane farmers.
– The agreement highlights a mutual commitment to adhere to WTO regulations, impacting local farmers positively and ensuring fair competition in Thailand’s sugar industry.
After years of contention, Thailand and Brazil have reached a significant resolution at the World Trade Organisation (WTO) regarding Thailand’s subsidies to sugarcane farmers. The dispute, which began in 2016 with Brazil’s allegations of WTO subsidy violations, saw its conclusion during the 13th WTO Ministerial Conference in Abu Dhabi, United Arab Emirates.
Pimchanok Pitfield, Thailandâs permanent representative at the WTO, and Guilherme de Aguiar Patriota, her Brazilian counterpart, finalised the agreement. This accord underscores the mutual commitment of both nations to adhere to WTO regulations.
Origin of the conflict and resolution
The conflict stemmed from Brazil’s complaint about Thailand’s sugarcane and sugar-milling practices. In response, Thailand embarked on reforms to align its industry with WTO guidelines. The memorandum of understanding signed in 2021 between the two nations established a bilateral consultation mechanism to oversee Thailand’s industry restructuring.
With the implementation of the 2022 Sugarcane and Sugar Act in December 2022, Thailand demonstrated its commitment to resolving the dispute following WTO standards. The cooperative efforts of both countries have been instrumental in achieving this milestone.
Thailandâs sugar export and revenue
This resolution holds significant implications for local farmers in Thailand. The adherence to WTO regulations ensures fair competition and a level playing field for sugarcane farmers, thereby safeguarding their interests and livelihoods.
As the world’s third-largest sugar exporter, Thailand’s sugar exports reached 6.54 million tonnes in 2022. Key markets such as Indonesia, the Philippines, South Korea, Cambodia, and Malaysia have contributed substantially to Thailand’s revenue from sugar exports.
