unctad.org | Farm Support and Trade Rules: Towards a New Paradigm Under the 2030 Agenda by Irene Musselli
Farm Support and Trade Rules: Towards a New Paradigm Under the 2030 Agenda by Irene Musselli
Book Information
Policy Issues in International Trade and Commodities, Study Series No. 74

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After more than two decades from the conclusion of the Uruguay Round, producer support remains a structural, systemic issue in agriculture. Most importantly, the playing field is far from level, due to factual and formal discriminations across countries. The Doha Round, if concluded, would redress these imbalances but only partially.

The “historic” Nairobi Package on agriculture, agreed at the 10th Ministerial Conference of the World Trade Organization (WTO) in December 2015, eliminates agricultural export subsidies. But important distortions and imbalances in the area of domestic support would stay. In particular, the proposed Doha disciplines would not obstruct the main gate-ways through which producer support is channeled today. How then to move forward in this setting? Where to set limits to farm support policies, beyond the terms of the Doha Draft, and how to arbitrate tradeoffs between “policy space” and “trade fairness”?

Efforts to define the way ahead should take into account two important developments, compared to the 1980 scenario. First, the forms by which farm support is provided in the advanced market-based economies have altered significantly since the mid-1980s: from market price support to income support “decoupled” from current production and prices. This type of support, largely notified under the WTO Green Box, is exempted from reduction commitments. Second, producer support is no longer a North issue: in nominal terms and as a percentage of farm receipts, farm support has increased appreciably in key emerging economies. In a few of them, producer support is now provided at a level comparable with the OECD average.

Given the changed scenario, and given that agricultural production accounts for around 24 per cent of all human-caused greenhouse gas emissions, the way ahead requires a pragmatic and groundbreaking pathway. Trade rules in general and domestic support disciplines in particular are to be reorganized around sustainable development outcomes. The boundaries of the Green Box have to be redefined accordingly. This re-orientation is needed if trade policy is to fit into the new programmatic framework shaped by the 2030 Agenda for Sustainable Development, the Addis Ababa Action Agenda, and the Paris Climate Change Conference.

This paper elaborates on this move. It first briefly highlights the unfinished nature of trade policy reform under the Uruguay Round. It then moves on to consider the major limits of the proposed Doha disciplines on domestic support, as outlined in the Revised Daft Modalities for Agriculture of 6 December 2008 (hereafter, the Doha Draft). As a conclusion, it outlines options as to the way ahead.

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