The AMS and domestic support in the WTO trade negotiations on agriculture: issues and suggestions for new rules

Abstract

This paper takes a hard look at developments in agricultural policies since the Uruguay Round in the context of commitments made under domestic support. An overview of policy developments is presented to evaluate the effectiveness of the disciplines imposed. Issues and suggestions for new multilateral rules are presented in order to improve disciplines in domestic support for the current WTO trade negotiations. The aggregation of the AMS commitment into a single measure covering all products and non-product specific support reduces the effectiveness of support reduction commitments. Spurious methods of measuring official administered support and world baseline prices result in over or under estimates of true support, or redundancy in support. The baseline is inflated because of low world prices in the baseline time period and because blue box payments are included in the baseline only but not for the reduction commitments. The conflation of AMS support with that of market access and export subsidy commitments, requires the need for a flashing amber box that focuses on domestic support with market effects (independent of market access and export subsidy support) so that its reduction results in meaningful trade liberalization.