Meeting Future WTO Commitments on Domestic Support

8/8/2019 Meeting Future WTO Commitments on Domestic Support

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Meeting Future WTO Commitments

on Domestic Support

David Blandford,

The Pennsylvania State University

Tim Josling,

Stanford University


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2007 The German Marshall Fund o the United States. All rights reserved.

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About GMF

The German Marshall Fund o the United States (GMF) is a non-partisan American public policy and grant-making institution dedicated to promoting greater cooperation and understanding between the United States

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P 3

Ax 1

R 11

Meeting Future WTO Commitments on Domestic Support

The Implications of Ambassador Falconers July 2007 Proposals

for the European Union and the United States

A Report to the German Marshall Fund of the United States

September 2007

Dv B

D A E R Sy

T Pyv S Uvy

T J

F S I I S

S Uvy


4/14


5/14

Meeting Future WO Commitments on Domestic Support:

he Implications o Ambassador Falconers July 2007 Proposals

or the European Union and the United States

3

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Existing WTO constraints

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vv

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EU 191 U

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(1995/963/4 EU 19951

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Projected Notifications

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6/14

he German Marshall Fund o the United States4

US F B w -z, w

EU/US k j v

Business as usual

WO

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AMS 5

de minimis - -

- AMS w

w x B Bx Hwv,

,

WO

I , w

U S

E U w

G Bx, v

US (5) WO

Billion

Euros

Billion

$

Year

Year

Figure 1U.S. AMS and WTO commitment 19952006

EU AMS and WTO commitment 19952006

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

0

10

20

30

40

50

60

70

80

90

AMS Limit

Current Total AMS

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

0

5

10

15

20

25

AMS Limit

Current Total AMS


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5

q E U

B Bx W

EU 3 M-

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v Hwv, w

8 H k S

v v

F US , w

US H Rv v

F B ( J )

US 8 w

U ,

w G Bx

w E U

U S

EU

AMS B Bx

Table 1. Main provisions of the Falconer proposals for EU/U.S. domestic support

European Union United States

Overall Trade-Distorting Domestic Support (OTDS)

B v F AMS () + 1% VOP+ B/5% VOP

R 5/85% 66/3%

Total Aggregate Measure of Support (AMS)

B v F v (U R A)

R % 6%

Product-Specific AMS

B ( x) 1995 19954 1995 AMS

De minimis

R 5/6% 5/6%

Blue Box

C (% VOP) 5% 5%

P D P x 1995 v

C x 11/1

Cotton Provisions

AMS C AMS v w

R 843% R 8%

C B Bx v C B Bx

Value of production (VOP)

B 1995

S: WO ()


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con vullaorem

zzrilit laorting

el do exer si tin

ulputem iure

velendrer sequat.

Ummy nissis eum

dolummy nullaor

amconsecte

exercilisl ut

vullandio odo

U S

-

-- AMS B

E U U S w v

w AMS

( w F ) w

w v

WO v

G Bx

I D R F

Falconers Draft Modalities

F j

w w WO

v

913, w

13 O

v E

Billion

$

Billion

Euros

Year

Year

Figure 2

U.S. projected notifications and current WTO limits 20062013

EU projected notifications and current WTO limits 20062013

2006 2007 2008 2009 2010 2011 2012 2013

0

10

20

30

40

50

60

70

80

90

Green Box

Total AMS

AMS Limit

Blue Box

2006 2007 2008 2009 2010 2011 2012 2013

0

10

20

30

40

50

60

70

80

90

Green Box

Total AMS

AMS Limit

Blue Box


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7

Iriuscidunt verci

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elessi. Um alis

dolor si. Ing eum

dolorem nullaor

tionseq uipsum

ipsusto dolore

feum quiscil iscil

er si et vent amc

ad dio eum vel

U U S , US -

w

B Bx,

AMS, w F

F A

ODS de

minimis w, w 1

U ODS AMS E U

U S v

( F 3) D ,

E

U ODS w

5 ODS 13

F U S, ODS

q

ODS 13, $13 US

Billion

$

Billio

n

Euros

Year

Year

Figure 3

U.S. projected notifications and WTO limitsFalconer A

EU projected notifications and WTO limitsFalconer A

2006 2007 2008 2009 2010 2011 2012 2013

0

10

20

30

40

50

60

70

80

90

Green Box

Total AMS

AMS limit

Blue Box

Blue Box limit

OTDS

OTDS limit

F FF F F F F F

2006 2007 2008 2009 2010 2011 2012 2013

0

20

40

60

80

100

120

Green Box

Total AMS

AMS limit

Blue Box

Blue Box limit

OTDS

OTDS limit


10/14


Cumsan hendio

con vullaorem

zzrilit laorting

el do exer si tin

ulputem iure

velendrer sequat.

Ummy nissis eum

dolummy nullaor

amconsecte

exercilisl ut

vullandio odo

AMS j x $6 $15 13

B Bx

E U

,

B

F 3 EU x B Bx w

F L vv

ODS,

de minimis

z 1

Billion

$

Billion

Euros

Year

Year

Figure 4

U.S. OTDS and alternative OTDS limits

EU OTDS and alternative OTDS limits

2006 2007 2008 2009 2010 2011 2012 2013

0

10

20

30

40

50

60

2006 2007 2008 2009 2010 2011 2012 2013

0

20

40

60

80

100

120

U.S. OTDS Limit A

U.S. Current OTDS

U.S. OTDS Limit L

U.S. OTDS Limit A

U.S. Current OTDS

U.S. OTDS Limit L


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9

Iriuscidunt verci

tinciduisi. Lis ad

elessi. Um alis

dolor si. Ing eum

dolorem nullaor

tionseq uipsum

ipsusto dolore

feum quiscil iscil

er si et vent amc

ad dio eum vel

A x, ODS k

ODS v

(F 4) U

U S v ODS

v (13)

WO

D R, w US

Gv

v U S

j k ,

U S v

, w x

w

v v

( )

U , w

w

I U S w x

AMS 13 $1 (

$15 w

) ODS $ 1

- F

- AMS

1995 v I U S,

w k x -

$163 v

B ,

(w ) AMS

( v 8 ) ,

v,

U S w v

E U

w -

1I w w x 95 w w w v S v 4

I v v AMS G Bx S

G Bx ,

- AMS w

q EU

B Bx - v

k v F U

S, w -

v

B k

w E U :

x ( ) v 1995

O , w

- (SFP)

w G Bx (w w q

x w

G Bx )

- EU

B Bx w F 5 w G

Bx v , B Bx

AMS v w

E U Hwv, v

j E U

G Bx

,

- w

The Bottom Line

A F J

1, E

U U S w j

A vw w

w v

O f w v T G Bx , I w v w


12/14


Cumsan hendio

con vullaorem

zzrilit laorting

el do exer si tin

ulputem iure

velendrer sequat.

Ummy nissis eum

dolummy nullaor

amconsecte

exercilisl ut

vullandio odo

D R

B WO

v v w

- S, vw w w

w x

E U U S

-

F w w

w

Ev F

w

EU US 13

z w

w k w

Annex:

Method for Projecting the Notifications

O ( k) EU

US WO

(1995/963/4 EU 19951

US) ( F 6) W

(

v ) w

k k

(

v ) w j

v w ,

k

F w

k j E U

U S w

Billion

euros

Year

Figure 5

EU notification of direct payments

2006 2007 2008 2009 2010 2011 2012 2013

0

10

20

30

40

50

60

70Green Box without SFP

Blue Box including SFP

AMS with no decoupling

Green Box with SFP

Blue Box without SFP

AMS with decoupling


13/14




11

Iriuscidunt verci

tinciduisi. Lis ad

elessi. Um alis

dolor si. Ing eum

dolorem nullaor

tionseq uipsum

ipsusto dolore

feum quiscil iscil

er si et vent amc

ad dio eum vel

j E C

US D A (USDA) (CEC,; USDA, ) W

O E C-

Dv () w

, , E

U

w , ,

w k

x I

j

( w ) A, w

k- w k

EU

US v w k

O

w k

EU/US k

j

WO

References:

C E C,

Prospects for Agricultural Markets and Income in the

European Union, 20062013, B,

O E C-

Dv,Agricultural Outlook Database,

J 8, ://www

US D A,Agricultural

Baseline Projections to 2016, W DC,

W Oz Draft Modalities for

Agriculture WO C A, 1

J , Gv

WTO obligations

De minimus limit

Notifications

Policy decisions

Pressure points

Sector conditions

External factors

Figure 6

Schematic representation of EU/U.S. domestic support simulators


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