pivotal or incidental for agricultural

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1 WTO disciplines on domestic support: pivotal or incidental for agricultural policies i in OECD countries? David Blandford blandford.d@gmail.com Canadian Agricultural Trade Policy and Competitiveness Research Network Westin Harbour Castle Hotel, Toronto May 28, 211 1

2 Work on domestic support disciplines i Initiated in 25 through International Food and Agricultural Trade Policy Council (IPC) Subsequent funding from World Bank (EU and US support simulators) IFPRI shadow WTO notifications project International Centre for Trade and Sustainable Development (ICTSD) Geneva Briefings Orden, Blandford and Josling (eds). WTO Disciplines on Agricultural Support: Seeking a Fair Basis for Trade, Cambridge University it Press, 211 2

3 WTO disciplines and domestic support key questions 1. How do the disciplines (UR and Doha) relate to support in major subsidizing countries? 2. Are the disciplines actually likely to be binding on support expenditures? 3. Are the disciplines likely to cause changes in domestic support policies? 3

4 WTO domestic support disciplinesi DS one of the three pillars of the UR Agreement on Agriculture (AoA) Members obliged to notify domestic support Current Total AMS (CTAMS) includes MPS, nonexempt direct payments and other product-specific support Blue Box Green Box CTAMS is supposed to be less than Final Bound Total AMS (FBTAMS) but no explicit sanctions for non-compliance under the AoA 4

5 Proposed Doha New concept Overall Trade Distorting Support OTDS = CTAMS + de minimis + blue box Tiered reductions in the bound OTDS and the UR FBTAMS Reduction in de minimis Cap on blue box support Product-specific AMS and blue box caps How do the existing and proposed relate to notified domestic support? 5

6 Canada: structure t of support 8, 7, 6, Millio on $ Can 5, 4, 3, Green Amber 2, 1, Source: Blandford based on WTO notifications 6

7 Canada: AMS 6, 5, llion $ Can Mi 4, 3, 2, 1, Current Total AMS UR binding Doha binding Source: Blandford based on WTO notifications and December 28 draft 7

8 Canada: AMS & UR de minimis i i 6, 5, llion $ Can Mi 4, 3, 2, 1, Current Total AMS PS DM NPS DM UR binding Doha binding Source: Blandford based on WTO notifications and December 28 draft 8

9 Canada: Excess of NPS over Doha de minimis 4. Ratio of NPS to Doha de min nimis Source: Blandford based on WTO notifications and December 28 draft 9

10 Canada: OTDS 4,5 4, 3,5 llion $ Can Mi 3, 2,5 2, 1,5 1, Current OTDS Doha binding Source: Blandford based on WTO notifications and December 28 draft. 1

11 Japan: structure t of support 7, 6, 5, on Yen Billi 4, 3, 2, Green Blue Amber 1, Source: Blandford based on WTO notifications 11

12 Japan: AMS 6, 5, 4, Billion Yen 3, 2, 1, Current Total AMS UR binding Doha binding Source: Blandford based on WTO notifications and December 28 draft 12

13 Japan: AMS & UR de minimis i i 6, 5, 4, Billion Yen 3, 2, 1, Current Total AMS PS DM NPS DM UR binding Doha binding Source: Blandford based on WTO notifications and December 28 draft 13

14 Japan: OTDS 4, 3,5 3, illion Yen B 2,5 2, 1,5 1, Current OTDS Doha binding Source: Blandford based on WTO notifications and December 28 draft 14

15 Korea: structure t of support 9, 8, 7, 6, Billio on Won 5, 4, 3, 2, 1, Green + S&D Amber Source: Blandford based on WTO notifications 15

16 Korea: AMS 2,5 2, illion Won B 1,5 1, Current Total AMS UR binding Doha binding Source: Blandford based on WTO notifications and December 28 draft 16

17 Korea: AMS & UR de minimis i i 3, 2,5 illion Won B 2, 1,5 1, Current Total AMS PS DM NPS DM UR binding Doha binding Source: Blandford based on WTO notifications and December 28 draft 17

18 Korea: OTDS 4,5 4, 3,5 illion Won B 3, 2,5 2, 1,5 1, Current OTDS Doha binding Source: Blandford based on WTO notifications and December 28 draft 18

19 Norway: structure t of support 25, 2, on NOK Milli 15, 1, Green Blue Amber 5, Source: Blandford based on WTO notifications 19

20 Norway: AMS 16, 14, 12, illion NOK M 1, 8, 6, 4, 2, Current Total AMS UR binding Doha binding Source: Blandford based on WTO notifications and December 28 draft 2

21 Norway: AMS & UR de minimis i i 16, 14, 12, illion NOK M 1, 8, 6, 4, 2, Current Total AMS PS DM NPS DM UR binding Doha binding Source: Blandford based on WTO notifications and December 28 draft 21

22 Norway: Blue box 9, 8, 7, illion NOK M 6, 5, 4, 3, 2, 1, Current Blue Doha binding Source: Blandford based on WTO notifications and December 28 draft 22

23 Norway: OTDS 2, 18, 16, 14, illion NOK M 12, 1, 8, 6, 4, 2, Current OTDS Doha binding Source: Blandford based on WTO notifications and December 28 draft 23

24 Switzerland: structure t of support 8, 7, 6, ion SFr Mill 5, 4, 3, Green Amber 2, 1, Source: Blandford based on WTO notifications 24

25 Switzerland: AMS 6, 5, 4, Million SFr 3, 2, 1, Current Total AMS UR binding Doha binding Source: Blandford based on WTO notifications and December 28 draft 25

26 Switzerland: OTDS 5, 4,5 4, 3,5 Million SFr 3, 2,5 2, 1,5 1, Current OTDS Doha binding Source: Blandford based on WTO notifications and December 28 draft 26

27 EU: structure t of support 1, 9, 8, 7, Millio on Euros 6, 5, 4, 3, 2, 1, Green Blue Amber 95/96 97/98 99/ 1/2 3/4 5/6 7/8 Note: EU15 to 3/4; EU25 for 4/5 and 5/6; EU27 thereafter Source: Blandford based on WTO notifications 27

28 EU: AMS 9, 8, 7, uros Million E 6, 5, 4, 3, 2, 1, 95/96 97/98 99/ 1/2 3/4 5/6 7/8 Current total AMS UR binding Doha binding Note: EU15 to 3/4; EU25 for 4/5 and 5/6; EU27 thereafter Source: Blandford based on WTO notifications and December 28 draft 28

29 EU: AMS & UR de minimis 9, 8, 7, Million Euros 6, 5, 4, 3, 2, 1, 95/96 97/98 99/ 1/2 3/4 5/6 7/8 Current total AMS PS DM NPS DM UR binding Doha binding Note: EU15 to 3/4; EU25 for 4/5 and 5/6; EU27 thereafter Source: Blandford based on WTO notifications and December 28 draft 29

30 EU15: Blue box 3, 25, Million Eur ros 2, 15, 1, 5, 95/96 97/98 99/ 1/2 3/4 5/6 7/8 Current Blue Doha binding Note: EU15 to 3/4; EU25 for 4/5 and 5/6; EU27 thereafter Source: Blandford based on WTO notifications and December 28 draft 3

31 EU: OTDS 8, 7, 6, uros Million E 5, 4, 3, 2, 1, 95/96 97/98 99/ 1/2 3/4 5/6 7/8 Current OTDS Doha binding Notes: EU15 to 3/4; EU25 for 4/5 and 5/6; EU27 thereafter Source: Blandford d based on WTO notifications and December 28 draft 31

32 US: structure t of support 12, 1, ion US dollars Milli 8, 6, 4, Green Blue Amber 2, Source: Blandford based on WTO notifications 32

33 US: AMS 25, 2, Million US dollars 15, 1, 5, Current Total AMS UR binding Doha binding Source: Blandford based on WTO notifications and December 28 draft 33

34 US: AMS & UR de minimis 3, 25, Millio on US dollars 2, 15, 1, 5, Current Total AMS PS DM NPS DM UR binding Doha binding Source: Blandford based on WTO notifications and December 28 draft 34

35 US: NPS and the Doha de minimis 18% 16% NP S as % of Do oha de mini mis 14% 12% 1% 8% 6% 4% 2% % Source: Blandford based on WTO notifications and December 28 draft 35

36 US: OTDS 3, 25, Million US do ollars 2, 15, 1, 5, Current OTDS Doha binding Source: Blandford based on WTO notifications and December 28 draft 36

37 US: projections Doha 5 Billion dollars OTDS limit OTDS AMS limit Total AMS Blue box limit Blue Box Source: Blandford based on WTO notifications and December 28 draft 37

38 US: projections Doha Excess of sugar AMS over product-specific binding 3 25 Million dollars Source: Blandford based on WTO notifications and December 28 draft 38

39 US: projections Water in the FBTAMS is reduced under the Doha disciplines "Water" without DDA agreement "Water" with DDA agreement Source: Blandford based on WTO notifications and December 28 draft 39

40 Adapting to the disciplines The weakness of the MPS concept Eliminating administered prices, e.g., Japan, Korea, Norway Redefining eligible quantities, e.g., US dairy MPS rarely corresponds to an economic measure of price support (cf. OECD PSE) Box inclusion and box shifting Shifts from amber to blue (e.g., EU, US) Measures that may not be green (e.g., Norway) Doha impact of the total package (three tiers) may be diluted by strategic behavior 4

41 Norway: adapting to the new disciplines 25 of commitm ment Percent AMS Blue box OTDS Current Box shifting Export subsidy commitment Market access commitment Eliminate administered prices Source: Blandford, Gaasland, Garcia and Vårdal, World Economy, 21.

42 The contribution to policy reform a mixed picture Cosmetic changes in policies are possible to stay within the commitments Box shifting that reflects real changes in policy (e.g., EU) can be significant ifi Doha commitments could induce policy changes by reducing the room for maneuver in trade- distorting support (e.g., US) Overall some international commitments (even if imperfect) are better than none! Ultimately the impact of DS commitments will be determined by the strength of overall commitment to multilateral institutions 42

43 Work on domestic support disciplines i Copies of the IFPRI Policy Brief: WTO Disciplines on Agricultural Support: Experience to Date and Assessment of the Doha Proposals by Orden, Blandford, Josling and Brink are available Live webcast from Washington, DC on June 7, 211 from 12:15 p.m. 1:45 p.m. EST (see IFPRI website) 43

44 WTO disciplines on domestic support: pivotal or incidental for agricultural policies i in OECD countries? David Blandford blandford.d@gmail.com Canadian Agricultural Trade Policy and Competitiveness Research Network Westin Harbour Castle Hotel, Toronto May 28,