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Rethinking Agricultural Domestic Support Under the World Trade Organization

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  • Hart, Chad E.
  • Beghin, John C.

Abstract

This paper focuses on the third pillar of the Uruguay Round Agreement on Agriculture (URAA) of the World Trade Organization (WTO), the discipline of agricultural domestic support. The paper examines the current definition of agricultural domestic support used by the WTO, focusing on the Aggregate Measure of Support (AMS) and other forms of support that are less to least distorting (Blue and Green Box payments). The analysis looks at the recent experience of four member states (the United States, the European Union, Japan, and Brazil). The structure of recent support varies considerably by country. Some countries, notably the United States, have strategically used the de minimis exemption to deflate their support figures substantially in order to remain within AMS limits, even though total support has exceeded these limits. The paper investigates the possible effects of changing the definition of the AMS so that it better reflects current support conditioned by market forces. If market prices (world and/or domestic) were to be used to compute current market support, a greater variability of the AMS would result, and violations of AMS limits would be more likely given the anticyclical nature of policies included in the AMS, especially for the United States and European Union.

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Bibliographic Info

Paper provided by Iowa State University, Department of Economics in its series Staff General Research Papers with number 12510.

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Date of creation: 01 Jan 2006
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Handle: RePEc:isu:genres:12510

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Postal: Iowa State University, Dept. of Economics, 260 Heady Hall, Ames, IA 50011-1070
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Web page: http://www.econ.iastate.edu
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References

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  1. Bernard Hoekman & Francis Ng & Marcelo Olarreaga, 2004. "Agricultural Tariffs or Subsidies: Which Are More Important for Developing Economies?," World Bank Economic Review, World Bank Group, vol. 18(2), pages 175-204.
  2. Wacziarg, Romain & Seddon, Jessica, 2000. "Trade Liberalization and Intersectoral Labor Movements," Research Papers 1652, Stanford University, Graduate School of Business.
  3. W. Jill Harrison & J. Mark Horridge & K.R. Pearson, 1999. "Decomposing Simulation Results with Respect to Exogenous Shocks," Centre of Policy Studies/IMPACT Centre Working Papers ip-73, Victoria University, Centre of Policy Studies/IMPACT Centre.
  4. Keeney, Roman & Thomas Hertel, 2005. "GTAP-AGR : A Framework for Assessing the Implications of Multilateral Changes in Agricultural Policies," GTAP Technical Papers 1869, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
  5. Hoekman, Bernard & Ozden, Caglar, 2005. "Trade preferences and differential treatment of developing countries : a selective survey," Policy Research Working Paper Series 3566, The World Bank.
  6. Messerlin, Patrick, 2003. "Agriculture in the Doha Agenda," Policy Research Working Paper Series 3009, The World Bank.
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  13. Finger, J. Michael & Schuknecht, Ludger, 1999. "Market access advances and retreats : the Uruguay Round and beyond," Policy Research Working Paper Series 2232, The World Bank.
  14. L. Alan Winters & Neil McCulloch & Andrew McKay, 2004. "Trade Liberalization and Poverty: The Evidence So Far," Journal of Economic Literature, American Economic Association, vol. 42(1), pages 72-115, March.
  15. Hoekman, Bernanrd & Ng, Francis & Olarreaga, Marcelo, 2003. "Reducing agrcultural tariffs versus domestic support : what's more important for developing countries?," Policy Research Working Paper Series 2918, The World Bank.
  16. Thomas W. Hertel & L. Alan Winters, 2006. "Poverty and the WTO : Impacts of the Doha Development Agenda," World Bank Publications, The World Bank, number 7411, October.
  17. L. Alan Winters, 2002. "Trade Liberalisation and Poverty: What are the Links?," The World Economy, Wiley Blackwell, vol. 25(9), pages 1339-1367, 09.
  18. Antoine Bouët & Yvan Decreux & Lionel Fontagné & Sébastien Jean & David Laborde, 2004. "A Consistent, Ad-Valorem Equivalent Measure of Applied Protection Across the World: The MAcMap-HS6 Database," Working Papers 2004-22, CEPII research center.
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Citations

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Cited by:
  1. Kym Anderson & Will Martin, 2005. "Agricultural Trade Reform and the Doha Development Agenda," Centre for International Economic Studies Working Papers 2005-17, University of Adelaide, Centre for International Economic Studies.
  2. Dobson, William D., 2005. "Free Trade Agreements and The Doha Round of WTO Negotiations -- Implications for the U.S. Dairy Industry," Discussion Papers 37464, University of Wisconsin-Madison, Babcock Institute for International Dairy Research and Development.
  3. Godo, Yoshihisa, 2012. "Evaluation of Japanese Agricultural Policy Reforms Under the WTO Agreement on Agriculture," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 125101, International Association of Agricultural Economists.
  4. Takahashi, Daisuke & Honma, Masayoshi, 2009. "Evaluation of the Japanese Rice Policy Reforms under the WTO Agreement on Agriculture," 2009 Conference, August 16-22, 2009, Beijing, China 51421, International Association of Agricultural Economists.
  5. Takahashi, Daisuke, 2012. "The distributional effect of the rice policy in Japan, 1986–2010," Food Policy, Elsevier, vol. 37(6), pages 679-689.
  6. Keith Walsh & Martina Brockmeier & Alan Matthews, 2005. "Implications of Domestic Support Disciplines for Further Agricultural Trade Liberalization," The Institute for International Integration Studies Discussion Paper Series iiisdp99, IIIS.
  7. Jean-Pierre Butault & Jean-Christophe Bureau, 2006. "WTO Contstaints and the CAP: Domestic Support in EU 25 Agriculture," The Institute for International Integration Studies Discussion Paper Series iiisdp171, IIIS.
  8. Philippidis, George & Hubbard, Lionel J. & Renwick, Alan W., 2006. "A CGE Analysis of the Harbinson Proposal: Outcomes for the EU25," Working Papers 45992, Scottish Agricultural College, Land Economy Research Group.
  9. Acmoody, Jacob & Balagtas, Joseph Valdes & Gray, Allan W., 2006. "Farm Level Incidence of the U.S. Farm Policy Proposal to the WTO," 2006 Annual meeting, July 23-26, Long Beach, CA 21260, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  10. Godo, Yoshihisa & Takahashi, Daisuke, 2008. "Japan: Shadow WTO Agricultural Domestic Support Notifications," IFPRI discussion papers 822, International Food Policy Research Institute (IFPRI).
  11. Daisuke Takahashi, 2009. "Quantitative evaluation of the Japanese rice policy reforms under the WTO agreement on agriculture," Economics Bulletin, AccessEcon, vol. 29(2), pages 712-725.
  12. Godo, Yoshihisa, 2012. "Evaluation of Japanese Agricultural Policy Reforms Under the WTO Agreement on Agriculture," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 125102, International Association of Agricultural Economists.

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