VIETNAM ACCESSION BY HONG KONG LOOKING UNLIKELY

It is unclear if Vietnam will be able to formally become a Member of the WTO in time for the December Ministerial Conference in Hong Kong. Following the 15 September session of the Working Party for the Accession of Vietnam, its chair, Ambassador Eirik Glenne of Norway, said that though the talks are moving forward, "we still have work to do."

During the meeting, the Vietnamese delegation answered Members' questions, outlined new domestic laws that had brought the country into compliance with various WTO rules, and pointed to their government's efforts to speed up the adoption of further WTO-related legislation. Some countries expressed concerns about Vietnam's investment regime, tax policies, and state trading enterprises.

Would-be members of the WTO are required to negotiate bilateral market access deals with any Members that request them. Vietnam has done so with several countries, including the EU and China. Deals with some major trading partners such as the US and Australia remain unfinished. Echoing civil society concerns that this bilateral component of Vietnam's accession process is used by developed countries to extract concessions that go beyond WTO requirements, the lead Vietnamese negotiator asked Members still in bilateral talks to "take due regards of Vietnam's difficulties and show reasonable and flexible requirements." India, Cuba, and the Association of Southeast Asian Nations (ASEAN) also asked those countries to refrain from making overly onerous demands.

Glenne indicated that he expected the remaining market access deals to be concluded in time for the next session of the Working Party, for which a precise date has not been scheduled.

ICTSD reporting.

EU SUGAR REGIME BACK IN SPOTLIGHT

In response to reports that the EU may export more of its internal sugar surplus, Australia, Brazil and Thailand have referred the matter to the 27 September 2005 meeting of the WTO Dispute Settlement Body (DSB). They allege that the EU is failing to comply with the Appellate Body's 28 April 2005 ruling that its sugar regime is inconsistent with WTO rules (see BRIDGES Weekly, 4 May 2005), and that the EU's actions run afoul of the ongoing arbitration process to set a deadline for EU compliance.

The EU's existing sugar regime guarantees domestic producers payment at a price considerably higher than world market levels. It establishes two categories of sugar production for internal consumption, 'A' and 'B' quotas. Sugar produced in excess of these is reclassified as 'C' sugar and exported. It is these exports that the WTO dispute panel and Appellate Body ruled against. They determined that the C sugar exports were being sold below their cost of production in part due to the cross-subsidisation from profits earned from artificially expensive domestic sugar. The EU also was found to be subsidising its sugar exports beyond its notified commitment, in violation of the WTO Agreement on Agriculture.

The WTO DSB ordered the EU to reduce its subsidised exports of sugar from approximately 5 million tonnes a year to 1.273 million tonnes, and slash export subsidies from an estimated EUR 2 billion per year to a maximum of EUR 499.1 million. However, due to an internal production surplus, the EU is said to be contemplating reclassifying some of its A and B quota sugar as C sugar for export. This would increase its subsidised exports of sugar to approximately 7.2 million tonnes, 6 million tonnes in excess of its commitments.

The 'EC -- Export Subsidies on Sugar' reports (WT/DS265/AB/R, WT/DS266/AB/R, WT/DS283/ AB/R) are available online at http://docsonline.wto.org.

ICTSD reporting; "Australia attacks EU over sugar export plan," REUTERS, 19 September 2005; "Complainants Slam EU Plan to Subsidize Sugar Exports; Breach of WTO Ruling Cited," WTO REPORTER, 20 September 2005; " EU Is Defying WTO Sugar-Export Ruling, Brazil, Australia Say," BLOOMBERG, 20 September 2005.