Agri Export Subsidies Fall

China Requests Waiver of 8.5% Domestic Subsidy Limit

At a separate meeting of the WTO’s regular committee on agriculture two weeks ago, trade negotiators also discussed a new paper from the Cairns Group on export competition, which argued that agricultural export subsidies and similar measures have “dramatically decreased.”

The paper also found that most food aid donors’ programmes are also consistent with proposed new Doha rules intended to ensure that aid does not inadvertently worsen food insecurity by displacing food producers by local farmers in recipient countries.

WTO members had agreed to an annual review of export subsidies and similar measures – grouped together by negotiators under the category of “export competition” – as part of a package of deals agreed at the trade body’s 2013 Bali Ministerial Conference.

“Export competition is doable – and people should do it,” said one trade negotiator familiar with the paper in comments to Bridges.

US is continuing to seek a commitment from China to establish a limit on the overall trade-distorting support (or OTDS) that the country would provide under an eventual Doha Round deal.

The most recent draft text includes a clause that effectively allows China – as a “recently-acceded member” – to exceed the limit on OTDS if the country’s “de minimis” payments are greater. Trade-distorting “de minimis” support is a share of the value of production - 8.5 percent in the case of China, 10 percent for other developing countries, and five percent for developed countries.

Trade sources told that the US is likely to have difficulty agreeing to the proposed limit on trade-distorting support after having passed the 2014 Farm Bill, which is expected to lead Washington to increase its trade-distorting payments, especially if agricultural prices continue falling.

At the same time, the US has argued that large developing countries such as China and India should accept tighter limits on their own trade-distorting farm subsidies.