WTO Agricultural Domestic Support Policy Implementation and A Study of Other Reform Directions - 中欧社会论坛 - China Europa Forum

WTO Agricultural Domestic Support Policy Implementation and A Study of Other Reform Directions

Authors: Tang Zhong

Extract from ” Management Worldly (Monthly), 2003, (1)“

After joining the WTO, there has been an exceptional amount of discussion on how China can increase agriculture support. A more consistent view is that according to China’s WTO commitments and WTO laws, there is still much room for policies in terms of domestic support. China’s government should make full use of the policy space to increase support for agriculture.

A popular view is: Under the Green Box policies, China has yet to utilise various policy tools and should utilise them as soon as possible. The Amber Box policies are also far from the committed value, and Blue Box policies are even less so, both of which should be fully utilised. These are studied from the perspective of how to execute according to WTO laws. A new round of discussion will discuss how to change the laws such that that will benefit China as much as possible and that they will meet WTO requirements. In developed countries such as Europe and the US, talks on how to reform WTO’s agricultural laws began not long after the Uruguay Round concluded. Theoretically and publicly, this is in line with the nations’ negotiating position. This article assesses the implementation of WTO’s laws for agricultural domestic support from the perspective of international negotiations and national competition and from the position which benefits China. The negotiating positions of major countries will be analysed and some opinions on the agricultural domestic support rules reform in the new round of discussion will be given.

After the Uruguay Round Agreements came into effect, according to WTO, the European Union, Japan and Canada are the developed member countries with the greatest decrease in amount of support. There is no change in the US and there is a slight increase in Australia. This shows that the Uruguay Round has certain effects on Japan and the European Union’s cut in domestic support. The US has not been restricted. With regard to the Amber Box (to be reduced), all major developed countries have not violated their commitments as their Amber Box subsidies are maintained within the committed level. Product concentration in the Amber Box support of developed countries is relatively high. Every country’s support concentrates on a few products which are sensitive products. A number of developing member countries has implemented, to a certain extent, WTO’s domestic support rules with special provisions for developing countries. Most of the implementations are of the first set of provisions, that is, measures for the government to encourage, directly or indirectly, the development of agriculture and rural areas.

There has been better implementation of WTO’s agricultural domestic support rules. All member countries have proceeded with reductions in the Amber Box as promised. So far, none of the members have been accused of breach of promise. Not every member has used every strategic tool in the policy boxes. In fact, not one of the policy measures are used by all the members. Each member draws up policies according to their own national conditions.

From the negotiating position of the major countries’ agricultural domestic support, the European Union, Japan and Korea’s proposals are generally very conservative and emphasise the multi-functionality of agriculture. The Uruguay Round agricultural negotiations are held between major developed countries and the voice developing counties, is generally unheard. Our prediction is: the impact of developing countries in the new round of agricultural negotiations will increase. Therefore, apart from the intense bargaining between the US, Cairns Group, the EU, Japan and other competitors, the difference in interests between developing countries and developed countries will be displayed during negotiations, and developing countries shall display a certain amount of strength.

In the interest of China, WTO’s domestic support policy should make the following reforms: First, abolish the Blue Box policy or combine the Blue Box and the Amber Box. Include Aggregate Measure of Support (AMS) and assume the obligation to reduce aids. Second, request developed countries to reduce Amber Box support further. Third, tighten the Green Box policy.

It is not possible for China to participate as one of the four major parties of the Uruguay Round negotiations, but China should participate actively in negotiations according to the principles of maximising China’s national interest. Being a participating member of the negotiations and joining WTO’s negotiations have completely different statuses. China has to utilise its authority as a member, to fully assess the positions of the parties, in order to formulate fairer agricultural trade rules, thereby contributing the wisdom of the Chinese.


Page translations: