Wto Agreement On Domestic Support

Reduction commitments are expressed as a measure of the total sum of support (TOTAL AMS), which includes all support for certain products as well as support that does not apply to certain products in a single digit. In the context of the ongoing negotiations, various proposals concern the extent to which these subsidies should be further reduced and whether limit values should be set for certain products instead of maintaining individual overall limits. In the Agriculture Agreement, the AMS is defined in Article 1 and Annexes 3 and 4. The main conceptual consideration is that there are essentially two categories of domestic support with little or no impact on trade (often referred to as Green Box measures) and, on the other hand, trade-distorting support (often referred to as Amber Box measures). For example, agricultural research or training provided by the government is considered to be of the first type, while purchase by the state at a guaranteed price (market price support) is considered to be in the second category. According to the Agreement on Agriculture, any internal support to agricultural producers is subject to rules. In addition, the overall monetary value of Amber Box measures, with a few exceptions, is subject to the reduction commitments on the schedule of each WTO Member providing such support. The second clause, domestic support, is the most important of the three. It generally contains rules on the granting of internal support or subsidies by Member States to their farmers. This report provides a brief overview of the WTO commitments that are most relevant to U.S. agricultural policy. A key question that many policymakers ask about virtually every new agricultural proposal is how it will affect the United States` obligations under the WTO.

The answer depends not only on the cost, but also on the design and objectives of the proposal, as described below. The latest U.S. notification on domestic support expenditures to the WTO (issued on 31 October 2018) applies to the 2016 harvest year. To date, the United States has never exceeded its spending limit of $19.1 billion. However, this objective was achieved in a few years (1999, 2000 and 2001) through a prudent application of the de minimis exclusion described below. The Uruguay Round agricultural package fundamentally changed the way domestic support for agricultural producers was treated under GATT 1947. One of the main objectives was to discipline and reduce domestic aid, while leaving governments a great deal of room for manoeuvre to shape national agricultural policy given the great diversity of specific circumstances in different countries and agricultural sectors. The agreed approach also aims to ensure that specific binding commitments in the areas of market access and export competition are not undermined by domestic support measures. The 2003 CAP reform, which decoupled most of the existing direct aid, and the subsequent sectoral reforms resulted in the transfer of most of the aid from the yellow and blue boxes to the green box (€61.6 billion in 2016/2017, see table below).


Author: daniele130