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Trade Policy between Law, Diplomacy and Scholarship pp 121–143Cite as

Is the WTO Agreement on Agriculture Still Up-to-Date?

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Part of the book series: European Yearbook of International Economic Law ((Spec. Issue))

Abstract

Unlike on trade the WTO Agreement on Agriculture (AoA) had a major impact on agricultural policies in the last twenty years. Although nominal support in OECD countries remained stable policies shifted from most distorting market price support to direct payments which are less trade distorting. This is a trend that can also be observed in major developing countries. This paper examines how this trend is apparent in the domestic support notifications of the EU, the US, Japan, Brazil, China and India. The move to so-called “green box” i.e. less trade distorting support is evident in the EU as well as in Japan and the US. In the US, however, the 2014 Farm Bill may signal a change of direction. In Brazil, China and India a similar trend is apparent. “Green box” support is predominant In Brazil and China whereas in India it comes second to development support in accordance with Article 6.2 AoA. If the Doha Round trade negotiations could be concluded on the basis of the broad consensus that existed in 2008 on agriculture such a result would not need major policy changes in developed nor in the developing countries referred to. But it would definitely restrain the possibility to revert to more trade distorting policies. It would also improve market access. Faced with the new challenges of food security, bio-fuels and climate change, the AoA appears capable of meeting them with the exception of food security where its rules on export taxes and restrictions are too weak.

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Notes

  1. 1.

    GATT (1958).

  2. 2.

    Brink (2011), pp. 23 (24).

  3. 3.

    Articles 4, 6, 9.3 AoA.

  4. 4.

    WTO (2014), p. 61.

  5. 5.

    OECD (2014), p. 27; Table 2.2, p. 72.

  6. 6.

    Swinnen et al. (2012), pp. 1089 (1091).

  7. 7.

    OECD (2013), p. 43.

  8. 8.

    OECD (2013), p. 43.

  9. 9.

    OECD (2013), p. 46 Figure 2.3.

  10. 10.

    Anderson (2013), pp. 260 et seq.

  11. 11.

    Anderson (2009), pp. 51 et seq.

  12. 12.

    E.g. by Blandford and Orden (2011), pp. 97 (100).

  13. 13.

    Swinnen et al. (2012), pp. 1089 (1099).

  14. 14.

    Josling and Swinbank (2011), pp. 61 (66).

  15. 15.

    EU’s Notification to the WTO Committee on Agriculture, 13 February 2014, G/AG/N/EU/17, pp. 9, 12.

  16. 16.

    Josling and Swinbank (2011), pp. 61 (92); Blandford and Josling (2011), pp. 69 (94) even come to EUR 18.9 billion.

  17. 17.

    EU’s Notification to the WTO Committee on Agriculture, 13 February 2014, G/AG/N/EU/17.

  18. 18.

    Josling and Swinbank (2011), pp. 61 (92).

  19. 19.

    In the Cotton Case, the Panel and Appellate Body ruled that the programme did not meet the criteria of paragraph 6 of the green box because of the ban on fruit and vegetables (Appellate Body Report, US—Subsidies on Upland Cotton, WT/DS267/AB/R, paras. 341-342). Although this is correct, the policy in substance meets the requirements of the green box to a large extent.

  20. 20.

    Blandford and Orden (2011), pp. 97 (108); US’ Notifications to the WTO Committee on Agriculture, 1 October 2012, G/AG/N/USA/89, p. 6; 29 August 2011, G/AG/N/USA/80, p. 6 and 9 January 2014 G/AG/N/USA/93, p. 6.

  21. 21.

    US’ Notification to the WTO Committee on Agriculture, 9 January 2014, G/AG/N/USA/93, p. 9.

  22. 22.

    US’ Notification to the WTO Committee on Agriculture, 9 January 2014, G/AG/N/USA/93, p. 5.

  23. 23.

    Blandford and Orden (2011), pp. 97 (108); US’ Notification to the WTO Committee on Agriculture, 9 January 2014, G/AG/N/USA/93, p. 7.

  24. 24.

    Blandford and Orden (2011), pp. 97 (107).

  25. 25.

    Blandford and Orden (2011), pp. 97 (99, 104, 118, 122 et seq.); US’ Notifications to the WTO Committee on Agriculture, 12 October 2010, G/AG/N/USA/77, p. 12; 29 August 2011, G/AG/N/USA/80, p. 2.

  26. 26.

    Blandford and Orden (2011), pp. 97 (130).

  27. 27.

    Blandford and Orden (2011), pp. 97 (147).

  28. 28.

    For 2008, see: US’ Notification to the WTO Committee on Agriculture, 12 October 2010, G/AG/N/USA/77, pp. 10–11. For 2011, see: US’ Notification to the WTO Committee on Agriculture, 9 January 2014, G/AG/N/USA/93, pp. 23–25.

  29. 29.

    See US’ Notification to the WTO Committee on Agriculture, 9 January 2014, G/AG/N/USA/93, pp. 23–25.

  30. 30.

    Blandford and Orden (2011), pp. 97 (131–132).

  31. 31.

    Smith (2014), pp. 5 et seq.

  32. 32.

    Smith (2014), p. 5.

  33. 33.

    Godo and Takahashi (2011), pp. 153 (174–175).

  34. 34.

    Godo and Takahashi (2011), pp. 153 (177).

  35. 35.

    Godo and Takahashi (2011), pp. 153 (177).

  36. 36.

    Godo and Takahashi (2011), pp. 153 (167).

  37. 37.

    Godo and Takahashi (2011), pp. 153 (164–165).

  38. 38.

    Japan’s Notification to the WTO Committee on Agriculture, 18 August 2011, WTO G/AG/N/JPN/167, p. 23.

  39. 39.

    Godo and Takahashi (2011), pp. 153 (168–169); Japan’s Notification to the WTO Committee on Agriculture, 18 August 2011, WTO G/AG/N/JPN/167, pp. 24 et seq.

  40. 40.

    Godo and Takahashi (2011), pp. 153 (166); OECD (2013), p. 182.

  41. 41.

    Godo and Takahashi (2011), pp. 153 (182).

  42. 42.

    Godo and Takahashi (2011), pp. 153 (181, 184).

  43. 43.

    Nassar (2011), pp. 223 (225, 229).

  44. 44.

    Nassar (2011), pp. 223 (225, 238–239); Brazil’s Notification to the WTO Committee on Agriculture, 23 April 2013, G/AG/N/BRA/30.

  45. 45.

    Brazil’s Notification to the WTO Committee on Agriculture, 23 April 2013, G/AG/N/BRA/30, p. 8.

  46. 46.

    Brazil’s Notification to the WTO Committee on Agriculture, 23 April 2013, G/AG/N/BRA/30, p. 8.

  47. 47.

    Nassar (2011), pp. 223 (229 et seq., 232 et seq.); Brazil’s Notifications to the WTO Committee on Agriculture, 1 March 2012, G/AG/N/BRA/27, and 23 April 2013, G/AG/N/BRA/30.

  48. 48.

    Nassar (2011), pp. 223 (263).

  49. 49.

    Nassar (2011), pp. 223 (234); Brazil’s Notification to the WTO Committee on Agriculture, 23 April 2013, G/AG/N/BRA/30, pp. 9, 14.

  50. 50.

    Nassar (2011), pp. 223 (268).

  51. 51.

    Ni Hongxing (2013), p. 12; Cheng (2011), pp. 310 (321, 324).

  52. 52.

    Ni Hongxing (2013), p. 23.

  53. 53.

    Ni Hongxing (2013), p. 23; Cheng (2011), pp. 310 (321–322, 324); China’s Notification to the WTO Committee on Agriculture, 13 October 2011, G/AG/N/CHN/21.

  54. 54.

    Ni Hongxing (2013), pp. 12–13; Cheng (2011), pp. 310 (328 et seq.) expresses his doubts too.

  55. 55.

    Ni Hongxing (2013), pp. 14–15.

  56. 56.

    As estimated by Cheng (2011), pp. 310 (326).

  57. 57.

    Ni Hongxing (2013), p. 13 also mentions the farm machinery purchase subsidy but it does not appear in China’s notification. The programme could fall into the green box as investment support but in the notification it does not show up there.

  58. 58.

    China’s Notification to the WTO Committee on Agriculture, 13 October 2011, G/AG/N/CHN/21, pp. 8 et seq.

  59. 59.

    Cheng (2011), pp. 310 (333).

  60. 60.

    China’s Notification to the WTO Committee on Agriculture, 13 October 2011, G/AG/N/CHN/21, pp. 22, 25.

  61. 61.

    Cheng (2011), pp. 310 (340 et seq.); China’s Notification to the WTO Committee on Agriculture, 13 October 2011, G/AG/N/CHN/21, p. 5.

  62. 62.

    India’s Notification to the WTO Committee on Agriculture, 1 October 2014, G/AG/N/IND/10 Corr. 1, p. 3, Gopinath (2011), pp. 277 (283 et seq.).

  63. 63.

    India’s Notification to the WTO Committee on Agriculture, 1 October 2014, G/AG/N/IND/10 Corr. 1, p. 3.

  64. 64.

    India’s Notification to the WTO Committee on Agriculture, 1 October 2014, G/AG/N/IND/10 Corr. 1, p. 3; Gopinath (2011), pp. 277 (283, 286).

  65. 65.

    India’s Notification to the WTO Committee on Agriculture, 10 September 2014, G/AG/N/IND/10, p. 5.

  66. 66.

    Gopinath (2011), pp. 277 (285, 288); India’s Notification to the WTO Committee on Agriculture, 10 September 2014, G/AG/N/IND/10, p. 5.

  67. 67.

    India’s Notification to the WTO Committee on Agriculture, 10 September 2014, G/AG/N/IND/10, pp. 16 et seq.

  68. 68.

    Gopinath (2011), pp. 277 (305).

  69. 69.

    Gopinath (2011), pp. 277 (290 et seq., 304 et seq.).

  70. 70.

    WTO Committee on Agriculture, Walker Report, 21 April 2011, TN/AG/W/4/Rev.4, pp. 13 et seq.

  71. 71.

    See Draft Ministerial Decision of 6 December 2013 on an Understanding on Tariff Rate Quota Administration Provisions, WT/MIN(13)/W/11.

  72. 72.

    See Ministerial Declaration of 7 December 2013 on Export Competition, 11 December 2013, WT/MIN(13)/40, WT/L/915.

  73. 73.

    Brink (2011), pp. 23 (40–41).

  74. 74.

    Annex 2 paras. 6 and 11 AoA.

  75. 75.

    See Draft Ministerial Decision of 6 December 2013 on General Services, WT/MIN(13)/W/9.

  76. 76.

    See Draft Ministerial Decision of 6 December 2013 on Public Stockholding for Food Security Purposes, WT/MIN(13)/W/10. The Decision prevented Members from launching a dispute settlement procedure on this matter until a permanent solution was to be found by the 11th Ministerial Conference in 2017. End of July 2014, the new government of India withdrew its approval of the Bali Decision and blocked the implementation of the decisions taken in Bali. By Decision of 27 November 2014 of the WTO General Council, WT/GC/W688, an agreement has been reached which accelerates the procedure and clarifies that no dispute settlement procedure could be launched as long as no permanent solution has been achieved.

  77. 77.

    Blandford and Josling (2011), pp. 69 (93–94).

  78. 78.

    Josling and Swinbank (2011), pp. 69 (93).

  79. 79.

    Blandford and Orden (2011), pp. 97 (142–143).

  80. 80.

    Smith (2014), pp. 11 et seq.

  81. 81.

    Godo and Takahashi (2011), pp. 153 (184–185).

  82. 82.

    Nassar (2011), pp. 223 (269 et seq.).

  83. 83.

    As a Member with an AMS commitment, Brazil can make use of the flexibility in the WTO Committee on Agriculture’s Walker Report, 21 April 2011, TN/AG/W/4/Rev.4, para. 27.

  84. 84.

    Cheng (2011), pp. 310 (346).

  85. 85.

    Gopinath (2011), pp. 277 (305–306).

  86. 86.

    Anderson (2009), pp. 3 (54–55).

  87. 87.

    OECD (2014), pp. 30 et seq.

  88. 88.

    Tangermann (2013), p. 11; available at http://www.ictsd.org/sites/default/files/research/AG_Policy_ok.pdf.

  89. 89.

    De Schutter (2011), p. 14.

  90. 90.

    See Draft Ministerial Decision of 6 December 2013 on General Services, WT/MIN(13)/W/9.

  91. 91.

    De Schutter (2011), p. 10.

  92. 92.

    Häberli (2010), pp. 297 (311).

  93. 93.

    AoA Annex 2 paragraph 3 with footnotes 5, and paras. 5 and 6).

  94. 94.

    See Draft Ministerial Decision of 6 December 2013 on Public Stockholding for Food Security Purposes, WT/MIN(13)/W/10, para. 2.

  95. 95.

    Article 10.4 AoA.

  96. 96.

    WTO Committee on Agriculture, Revised Draft Modalities for Agriculture, 6 December 2008, TN/AG/W/4/Rev.4 Annex L.

  97. 97.

    Häberli (2010), pp. 297 (316) claims that Annex L does not improve the situation. But his selective quotations of Annex L do not give sufficient credit to the text as a whole.

  98. 98.

    Article XI:2 lit. a GATT 94.

  99. 99.

    Howse and Josling (2013), p. 17 argue that Article XI:2 lit. a GATT 94 and Article 12 AoA do not exempt taxes with predominantly trade-restricting purposes but this is hardly compatible with the wording of these provisions.

  100. 100.

    Häberli (2010), pp. 297 (318) agrees.

  101. 101.

    Tangermann (2013), available at http://www.ictsd.org/sites/default/files/research/AG_Policy_ok.pdf; for other options to remedy the situation, see ICTDS Information Note, June 2014, on Agricultural Export Restrictions, Food Security and the WTO, pp. 7 et seq.

  102. 102.

    Annex 3 para. 7 AoA; Blandford (2013), p. 6, available at http://e15initiative.org/wp-content/uploads/2013/08/Blandford_AG_E15_think-piece_26.08.13.pdf, denies the application of the AoA but ignores Annex 3 para. 7 AoA.

  103. 103.

    Häberli (2010), pp. 297 (314).

  104. 104.

    Tangermann (2013), p. 20, available at http://www.ictsd.org/sites/default/files/research/AG_Policy_ok.pdf.

  105. 105.

    Wheeler and von Braun (2013), pp. 508 (510 et seq.).

  106. 106.

    Annex 2 AoA para. 12.

  107. 107.

    Blandford (2013), p. 5, available at http://e15initiative.org/wp-content/uploads/2013/08/Blandford_AG_E15_think-piece_26.08.13.pdf.

  108. 108.

    Annex 2 AoA paras. 1a), c) and d).

  109. 109.

    Annex 2 AoA para. 8.

  110. 110.

    Annex 2 AoA paras. 11 and 13.

  111. 111.

    Blandford (2013), p. 16, available at http://e15initiative.org/wp-content/uploads/2013/08/Blandford_AG_E15_think-piece_26.08.13.pdf.

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Authors and Affiliations

  1. Former Deputy Director-General for Agriculture, European Commission, Avenue Napoleon 39, 1180, Bruxelles, Belgium

    Rolf Möhler

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  1. Rolf Möhler
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  1. University of Passau, Passau, Germany

    Christoph Herrmann

  2. Iran-United States Claims Tribunal, The Hague, The Netherlands

    Bruno Simma

  3. Ludwig Maximilians University Munich, Munich, Germany

    Rudolf Streinz

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Möhler, R. (2015). Is the WTO Agreement on Agriculture Still Up-to-Date?. In: Herrmann, C., Simma, B., Streinz, R. (eds) Trade Policy between Law, Diplomacy and Scholarship. European Yearbook of International Economic Law(). Springer, Cham. https://doi.org/10.1007/978-3-319-15690-3_10

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