Agricultural Domestic Support Reforms at the wto: An Assessment of the Proportional Reduction Approach

Abstract

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.

Promoting food security through public stockholding – Indian perspective and challenges at the WTO

“…The members who provided high levels (i.e. exceeding their de minimis ) of Amber box subsidies during the Uruguay Round secured their policy space to continue such provision, in the form of AMS entitlements, even after the advent of the AoA (Sharma et al , 2022b). This flexibility to provide high levels of trade-distorting subsidies was notably retained in their WTO schedule of commitments.…”

“…As observed by the panel in India – Measures Concerning Sugar and Sugarcane , [17] the policy space to provide Amber box support is limited to its de minimis 10% of the VoP of the concerned product, as India does not have AMS entitlements in its WTO schedule of commitments. In contrast, for major developed members like the USA and EU, the de minimis limit of 5% does not constrain them as they have additional policy space in the form of AMS entitlements (Sharma et al , 2022b). For instance, the USA and EU have an AMS entitlement of US$19bn [18] and 72bn Euros, [19] respectively.…”

“…15. Sharma et al (2022b); Refer to Article 6.4 read along with Article 7.2(b) of the AoA. Also, refer Panel Report, India – Measures Concerning Sugar and Sugarcane , para.…”