WTO's Three Pillars: Reduce Domestic Support
Commitment: Developed countries committed
to limit support for trade-distorting (amber box) domestic
policies
to a level no higher than 80 percent of the 1986-88 support
level by the year 2000. An indicator called the "AMS" is
used to measure support by combining producer payments
and price support
benefits directly influencing production decisions (amber box).
A special exemption was allowed for payments tied to limits
on production (blue box). Policies having minimal effects on
production or trade (green box) were excluded from the
AMS. |
| A traffic light analogy is used to catergorize WTO domestic support policies and to place them in one of four colored policy boxes |
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Prohibited policies that must be stopped (an empty red box, as no domestic policies were prohibited) |
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Policies subject to careful review and reduction over time are amber box policies (includes market price support, payments related to current production or prices, and input subsidies) |
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Payments made in conjunction with production-limiting programs are in the blue box (includes the 1986-95 deficiency payments in the U.S.) |
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Green box policies are considered nontrade-distorting and are not subject to any limitations (includes domestic food aid and environmental programs) |
- Domestic support was well below WTO goals in many countries—Many
countries' aggregate measures of supports (AMS) were far below
their WTO commitment ceiling in years prior to 1998. Higher AMS
levels are expected in 1998-2000 due to lower agricultural prices.
- Green box policies become more important with reduced amber
support—The 13 countries with the lowest AMS's as a percentage
of WTO ceiling have the majority of their support in the green
box.
- Few countries depend on the blue box—EU and Norway have high
AMS's relative to their ceilings and depend on their large blue
box exemptions to ensure compliance with AMS ceilings.
- Multifunctionality goals cited as rationale for high AMS—Some
countries with high AMS's are the most vocal proponents of a multifunctionality
exemption for production-distorting policies. They argue that
support from such policies should not be subject to AMS limitations
because the policies provide socially desirable "nonfood outputs,"
or "joint products," such as open space, wildlife habitat, etc.
- Cairns Group countries want all trade-distorting policies reduced—They
argue that domestic goals can be achieved more efficiently with
policy approaches that do not distort trade.
Source Data
More remains to be done: Trade distortions from
domestic support policies have likely been significantly reduced,
however, domestic support expenditures increased in recent years.
Much more could be accomplished if more countries reallocated
their agricultural budgets away from amber box policies and
toward green box policies. |
Data source: WTO domestic support notifications.
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Increase Market Access, Reduce
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