At the WTO, many members have stressed the differentiated trade distorting effects of product-specific and non-product specific support measures, and have insisted that real reform in domestic support would come only if product-specific support is effectively curtailed. This paper summarises the use WTO Members have made of specific provisions of the AoA that allow them to legally provide trade-distorting support, and attempts to respond to the essence of the debate. Besides proposing explicit rules for curtailing product-specific and non-product specific support, the paper also provides options on how to address flexibilities that may be required to deal with long-standing sensitivities.
The year 2020 will mark almost 20 years of arduous negotiations on agriculture since the launching of the Doha Round of multilateral trade negotiations, also known as the Doha Development Agenda (DDA).
For a variety of reasons, the protracted and intense negotiations that ensued during these first two decades of the new millennium have attained little in terms of substantive tangible negotiated outcomes in agriculture as in other sectors.
With negotiations continuing unabated at the Committee on Agriculture Special Session (CoA-SS), a renewed effort has been made in recent years with a large number of technical papers being submitted, based on factual analyses of Member-notified domestic support data, with a focus increasingly on the individual components of such support. These analyses confirmed amply the particularities of the agricultural sector in the economies of different countries and highlighted the challenges and sensitivities in reforming further the sector and what compromises this may entail, notwithstanding the expectations of the DDA and the built-in agenda of Article 20 of the Agreement on Agriculture (AoA).
The focus of this paper is on trade-distorting (TD) domestic support, as defined under the relevant provisions of the AoA. It summarises the use Members have made of specific provisions of the AoA that allow Members to legally provide TD support and what differentiates TD support provided under the separate Boxes of the AoA. It makes the case of fudgibility in the provision of TD support and its effects, and questions the rationale of continuing the Box-dispersed entitlements of TD support in the AoA.
The AoA was supposed to be the first step of the reform process and in many ways it served well as several large subsidizing Members have made substantial reforms in domestic support policies over the years of its implementation. While the AoA facilitated a transition to much less distortions than 30 years ago, its present structure is widely seen as ineffective in disciplining further TD support and it has also been a constant irritant to some Members for perpetuating entitlements to subsidize. In short, the AoA in its present form has run its course.
The approach proposed in this paper is an attempt to respond to the essence of the debate on domestic support in the WTO CoA- SS whereby many Members have stressed the differentiated trade distorting effects of product-specific and non-product specific support measures and, in turn, have insisted that real reform in domestic support would come only if product-specific support is effectively curtailed.
The paper argues that correction of the architectural weaknesses of the AoA is a prerequisite for building effective disciplines to deal with trade distorting domestic support. This would entail getting away from artificially compartmentalized support measures, by consolidating disciplines along transparent traits, amenable to better monitoring, especially as regards the product and non- product specificity of different support measures.
The paper builds on this essential structural change by formulating explicit rules for curtailing product-specific and non-product specific support and demonstrates how these rules can be applied in practice. It also provides some options on how to address flexibilities that may be required to deal with long-standing sensitivities and for addressing the fundamental requirement of any reform to take fully into account the special and differential needs of developing Members.