Agreement On Agriculture Amber Box

December 2, 2020 – 9:59 am

In the 1980s, public payments to agricultural producers in industrialized countries generated large crop surpluses, which were unloaded by export subsidies on the world market, causing food prices to fall. Tax pressure on safeguards has increased, due to both lower import duty revenues and increased domestic spending. Meanwhile, the global economy has entered a cycle of recession and the perception that market opening could improve economic conditions has led to calls for a new round of multilateral trade negotiations. [2] The cycle would open up markets for high-tech services and goods and ultimately generate much-needed efficiency gains. To engage developing countries, many of which were new international disciplines, agriculture, textiles and clothing were added to the big deal. [1] The agreement has been criticized by NGOs that classify subsidies in national trade-distorting subsidies (the “amber box”) that need to be reduced and non-trade-distorting subsidies (blue and green boxes) that can escape discipline and therefore be increased. While efficient agricultural exporters are pushing WTO members to reduce their support for the “amber box” and the “blue box” that distorts trade, green box spending in industrialized countries has increased. The blue box is an exception to the general rule that all production-related subsidies must be reduced or maintained within the limits set by the de minimis minimums. It includes payments directly related to the number of land or animals, but under regimes that also limit production by imposing production quotas or forcing farmers to surrender part of their land. Countries that use these subsidies, and there are only a handful that say they distort trade less than alternative subsidies to bernstein-box. Currently, the only members to report to the WTO that they use or have used the blue box are the EU, Iceland, Norway, Japan, the Slovak Republic, Slovenia and the United States (more now with the box). What all this means, according to Mississippi agriculture economist Darren Hudson, is that all support payments, considered trade-distorting and subject to restrictions and disciplines, fall into the amber box. In the run-up to the 1986 GATT Ministerial Conference in Punta del Este, Uruguay, agricultural lobbies in industrialized countries have vehemently opposed agricultural trade-offs.

In this context, the idea of excluding “trade-neutral” production and subsidies from WTO commitments was first proposed in 1987 by the United States and soon replicated by the EU. [2] By guaranteeing continued support to farmers, it has also neutralized the opposition. In exchange for the integration of agriculture into WTO disciplines and the obligation to reduce trade-distorting subsidies in the future, developed countries could maintain subsidies that result in “no more than minimal trade distortion” in order to achieve different public policy objectives. [1] The blue box includes all aid payments that are not subject to the Amber Box Reduction Agreement, as these are direct payments under a production limitation program. Domestic support regimes for agriculture are governed by the agriculture agreement, which came into force in 1995 and was negotiated during the Uruguay Round (1986-1994).

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