While the benefits of preferential trade agreements granted by the European Communities to the ACP countries have been lauded, the efficiency of such preferences in achieving the underpinning objectives of the preferences has also been contested in some quarters. Whenever multilateral trade negotiations move towards reducing most-favoured-nation tariffs, countries benefiting from trade preferences are concerned over the impact the reductions will have on such preferences. The debates over the value of preferences seem recently to have intensified due to a number of complaints brought before the WTO dispute settlement system that challenge the legality of the preferences or other measures linked to the preferences. Though it places some emphasis on the Appellate Body rulings in the case EC - Tariff Preferences, this article examines primarily, in light of the relevant GATT/WTO provisions and the EC's sugar reform proposals, the implications the Dispute Settlement Body's (DSB's) report in European Communities - Export Subsidies on Sugar will have for the EC/ACP sugar preferences.