December 3, 2003	Wednesday	Shawwal 8, 1424

GENEVA, Dec 2: The World Trade Organization has upheld a complaint by India against the European Union, ruling that favourable treatment granted to 12 developing countries fighting drug trafficking fell foul of global trade rules, trade sources said on Tuesday.

The decision by a panel of the WTO’s Disputes Settlement Body followed an Indian complaint earlier this year against EU measures aimed at encouraging farmers in those countries, including Pakistan, to grow crops other than illicit drugs.

The WTO panel found that the EU trade preferences given to Bolivia, Colombia, Costa Rica, Ecuador, El Salvador, Guatemala, Honduras, Nicaragua, Pakistan, Panama, Peru and Venezuela discriminated against other countries.

It said that the EU “through the exclusion of Iran and inclusion of Pakistan has not demonstrated to the panel’s satisfaction that the application of the Drug Arrangements does not constitute arbitrary and unjustified discrimination between countries where the same conditions prevail”.

The EU has argued that its arrangements to combat drug production and trafficking were allowed under the WTO’s “enabling clause” which allows special and differential treatment to help developing countries.

But the panel found that the regime did not provide identical favours to all developing countries.—AFP