Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in Asian Development Bank InstituteThe Working Paper series is a continuation of the formerly named Discussion Paper series; the numbering of the papers continued without interruption or change. ADBI's working papers reflect initial ideas on a topic and are posted online for discussion. ADBI encourages readers to post their comments on the main page for each working paper (given in the citation below). Some working papers may develop into other forms of publication. AbstractThe Indian economy has shown considerable resilience to the global economic crisis by maintaining one of the highest growth rates in the world. The services sector accounted for around 88% of the growth rate in real gross domestic product in 2008-09. To demystify the relatively resilient growth of the services sector in India, this study examines both the demand-side and the supply-side factors that have contributed to its growth To assess the role of external demand, income elasticity of export demand for the aggregated services and some of the disaggregated services of India were estimated. It was found that the main driver of growth in India's services sector is growth in the domestic demand for services and not growth in the export of services. The contribution of the growth of the export of services to the growth of the overall services sector was only 22%. In order to examine the role of supply-side factors, total factor productivity growth was estimated in the services sectors that have contributed substantially to overall growth, which are the software and banking services. Using Data Envelopment Analysis at the firm level, it was found that both these sectors experienced productivity growth above 10% after 2000. High domestic demand and high productivity growth largely explain the resilience of India's services growth.

Domestic support reforms remain an unresolved and contentious issue in the WTO agricultural negotiations. There are proposals to halve the current global trade-distorting domestic support entitlements by 2030, where members would have to undertake reductions proportionate to their existing domestic support entitlements. This study critically examines the implications of the proportional reduction approach on the policy space of 164 WTO members to support their farmers. The results show that this approach fails to address the issues and concerns of developing members regarding domestic support reforms, and these members would be required to undertake higher reduction commitments than their developed counterparts. Additionally, the per-farmer entitlement for developed members would remain massive under this approach. Contrary to general belief, the least developed countries would lose half of their flexibility to support their farmers. Further, the proposed approach would dilute the existing special and differential treatment for developing, and least developed, members.

Developing countries have been demanding substantial reduction in trade distorting domestic support to agriculture given by the developed countries. On the other hand, under the existing rules of the Agreement on Agriculture (AoA) many developing countries lack policy space to implement price support measures to augment income of the farmers. Of late, some member countries of WTO namely, Brazil, European Union, Colombia, Peru and Uruguay circulated a proposal on Overall Trade Distorting Support (OTDS) seeking a cap on trade distorting spending. This study critically examines the implications of EU-Brazil proposal regarding OTDS on the flexibility for the member countries to provide domestic support to agriculture. The results show that EU-Brazil proposal is likely to result in a steep reduction in policy space for the developing countries, which is already limited and insufficient for implementing agricultural policies. Concurrently, USA and EU will undertake negligible or no reductions in trade distorting support to agriculture and preserve their existing flexibilities in future as well. Contrary to Doha Declaration, this proposal is providing special and differential treatment to EU and USA.

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Developing members at the WTO face a shrinkage in policy space for supporting their agricultural sector due to the limited room available under the provisions of the Agreement on Agriculture (AoA). Contrastingly, most developed members can provide high levels of product-specific support without breaching their commitments on account of their support entitlements. For some of these members, the so-called ‘Blue Box’ under the AoA, plays a pivotal role in expanding the policy space with respect to domestic support to agricultural products. Though a lot of scholarship has discussed and examined other support provisions under the AoA, the ‘Blue Box’ remains relatively shrouded in mystery. Testimony to this is the fact that although the Blue Box has found use amongst developed members, no developing member, except for China in 2016, has ever used the Blue Box to support their producers. Given the impasse in the Doha Round of negotiations and limited flexibilities available under the AoA, this paper examines the feasibility and compatibility Blue Box measures with developing members’ socio-economic situation. Findings of this paper bring to fore the variations in member practice and the operational flexibilities available in implementing Blue Box programmes to support agriculture. JEL: F13, F14, F17, Q17