Within the EU-25, certain northern member states such as France and Germany are reasonably efficient producers and certain Mediterranean states, such as Greece and Italy, are inefficient producers (Source: USDA Foreign Agriculture Service). While the EU sugar regime is supposed to be self-financing through a series of producer levies, several parts of the regime are funded through the EU budget, mainly the subsidized export of white sugar and production refunds for sugar used by the chemical industry. According to USDA Foreign Agriculture Service, these subsidies amount to roughly €1.7 billion a year (US$ 2.1 billion). These subsidies encourage even the inefficient producers to manufacture more sugar which is dumped on the global markets.

On April 28, 2005 the World Trade Organization's highest court issued a final ruling that orders the European Union to stop dumping subsidized sugar illegally on global markets or face trade sanctions. The decision by the WTO's Appellate Body in Geneva gives the EU up to 15 months to bring itself into compliance with global trade rules. Last year, a panel of WTO experts found the EU exported about 4 MMT of sugar in 2000-2001, the period under investigation, or about 3 times more than the rules allow.

The WTO court ruling can be expected to reduce the amount of exports from EU thereby raising Global sugar prices. The reduction in EU exports can be expected to lead to a reallocation of US import quotas, to the benefit of non-EU white sugar producing countries.