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WTO Constraints on U.S. and EU Domestic Support in Agriculture: Assessing the October 2005 Proposals

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  • Brink, Lars

Abstract

Proposals on domestic support were submitted in the WTO agriculture negotiations by the USA, the EU, and the G-20 in October 2005, based on the 2004 Framework agreement. This paper pays attention to the de minimis rules and the resulting de minimis allowances and projects future (2014) distorting support for the USA and the EU-15. It calculates the constraints resulting from projected values of production combined with the U.S., EU and G-20 proposals and compares their effectiveness in constraining components of distorting support and the projected future applied support. The de minimis rules make a difference in estimating how much distorting support can be provided in the future. Under the U.S. proposal the Overall commitment does not constrain either the USA or the EU. Under the EU and especially the G-20 proposals the Overall commitment constrains distorting support to be less than the sum of the cap on blue and the maximum usable components. This maximum is smaller than the sum of the commitment on Total Aggregate Measurement of Support (AMS) and the de minimis allowances. The U.S. proposal constrains only one component (Current Total AMS) and this only for the EU. The EU proposal does not constrain projected future applied support in either the USA or the EU. The G-20 proposal constrains the future Current Total AMS for both the USA and the EU. The G-20 proposal constrains projected future Overall distorting support for the EU but not for the USA.

Suggested Citation

  • Brink, Lars, 2005. "WTO Constraints on U.S. and EU Domestic Support in Agriculture: Assessing the October 2005 Proposals," Working Papers 14601, International Agricultural Trade Research Consortium.
    • Handle: RePEc:ags:iatrwp:14601
    DOI: 10.22004/ag.econ.14601
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    References listed on IDEAS

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    1. Brink, Lars, 2005. "WTO 2004 Agriculture Framework: Disciplines on Distorting Domestic Support," Working Papers 14587, International Agricultural Trade Research Consortium.
    2. Sumner, Daniel A., 2003. "Implications of the US Farm Bill of 2002 for agricultural trade and trade negotiations," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 47(1), pages 1-24.
    3. Bruce A. Babcock & Chad E. Hart, 2005. "How Much "Safety" Is Available under the U.S. Proposal to the WTO?," Center for Agricultural and Rural Development (CARD) Publications 05-bp48, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    4. Chad E. Hart & Bruce A. Babcock, 2005. "Loan Deficiency Payments versus Countercyclical Payments: Do We Need Both for a Price Safety Net?," Center for Agricultural and Rural Development (CARD) Publications 05-bp44, Center for Agricultural and Rural Development (CARD) at Iowa State University.
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    Cited by:

    1. Butault, Jean-Pierre & Bureau, Jean-Christophe, 2006. "WTO Constraints and the CAP: Domestic Support in EU-25 Agriculture," Working Papers 18879, TRADEAG - Agricultural Trade Agreements.
    2. Will Martin & Kym Anderson, 2008. "Agricultural trade reform under the Doha Agenda: some key issues ," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 52(1), pages 1-16, March.
    3. Giovanni Anania, 2007. "Multilateral trade negotiations, preferential trade agreements and European Union’s agricultural policies," QA - Rivista dell'Associazione Rossi-Doria, Associazione Rossi Doria, issue 3, July.
    4. Kerr, William A., 2009. "Recession, International Trade and the Fallacies of Composition," Estey Centre Journal of International Law and Trade Policy, Estey Centre for Law and Economics in International Trade, vol. 10(1), pages 1-11.
    5. Kerr, William A., 2015. "Food Security, Strategic Stockholding and Trade-Distorting Subsidies: Is There a Permanent Solution?," Estey Centre Journal of International Law and Trade Policy, Estey Centre for Law and Economics in International Trade, vol. 16(1), pages 1-13.
    6. Lars Brink, 2009. "WTO Constraints on Domestic Support in Agriculture: Past and Future," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 57(1), pages 1-21, March.
    7. Anania, Giovanni, 2007. "Multilateral Negotiations, Preferential Trade Agreements and the CAP. What's Ahead?," Working Papers 7283, TRADEAG - Agricultural Trade Agreements.
    8. Mane, Ranjit & Wailes, Eric J., 2006. "Impacts of trade liberalization in rice: assessing alternative proposals," 2006 Annual meeting, July 23-26, Long Beach, CA 21188, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    9. Cardwell, Ryan T., 2008. "Food Aid and the WTO: Can New Rules Be Effective?," Estey Centre Journal of International Law and Trade Policy, Estey Centre for Law and Economics in International Trade, vol. 9(1), pages 1-20.
    10. Brockmeier, Martina & Pelikan, Janine, 2008. "Agricultural market access: A moving target in the WTO negotiations?," Food Policy, Elsevier, vol. 33(3), pages 250-259, June.
    11. Kerr, William A., 2007. "Too Smart for Their Own Good! Complexity, Capacity and Credence in Trade Negotiations," Estey Centre Journal of International Law and Trade Policy, Estey Centre for Law and Economics in International Trade, vol. 8(2), pages 1-14.

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