Transparency and Monitoring in Agricultural Trade: Policy Options for the Post-Bali Agenda

Transparency is essential to the smooth functioning of a trade system. Improved transparency in agricultural policies and markets will allow trade to play a full role in achieving global food security. The situation has improved since the Uruguay Round, with extensive monitoring activities embedded in WTO Agreements. Monitoring of the obligations under the Agreement on Agriculture (AoA) has led to the collection of considerable data on the policies of WTO Members. This data provides the basis for a deeper understanding of the extent to which policies are consistent with the smooth functioning of the trade system. The monitoring has, however, been tardy and Members’ classification of policies has been inconsistent. Certain policies that are crucial to food security, including biofuel subsidies and export restrictions, have not been adequately notified to the relevant WTO Committees. The 2008 Draft Modalities contains a revised Article 18 of the AoA that would strengthen rules on notification and encourage more scrutiny by the Committee on Agriculture of country policies. It would also improve transparency if the notifications relating to obligations under the AoA were to be aligned with notifications of the same subsidies under the Agreement on Subsidies and Countervailing Measures. This should include the notification of biofuel subsidies. Notification and binding of export restrictions for nonagricultural products has been discussed in the Non-Agricultural Market Access talks in the Doha Round—if this were instituted for agricultural products the transparency of the trade system would improve. Coordination of the WTO and OECD databases would lead to a more useful basis for policy evaluation. In addition, more information on agricultural policies could be integrated with the Trade Policy Reviews of WTO Members.