WTO's Three Pillars: Reduce Export Subsidies
Commitment: Developed countries committed to
reduce subsidized exports by 21 percent in volume and 36 percent
in value by the year 2000 (14 percent and 24 percent by the
year 2004 for developing countries). New subsidies cannot be
introduced. Bona fide food aid and export market promotion and
advisory services are exempt. Use of marketing practices to
circumvent export subsidy commitments is restricted. |
- The European Union accounts for most export subsidies—All countries
spent over $27 billion on export subsidies during 1995-98. The
EU accounts for over 89 percent of expenditures and the United
States for just under 1.5 percent. The EU depends heavily on subsidies
because it supports internal market prices above world prices.
Source
Data
- Agenda 2000 reforms will reduce EU dependence on export subsidies—The
EU recently enacted reforms to lower support prices for grains
and beef, partly to meet its WTO commitments.
- U.S. export subsidies are well below commitment levels—The
United States has made minimal use of export subsidies for grains
and poultry since the mid-1990's. The 1996 Farm Act required that
dairy export subsidies be used at maximum permissible WTO levels.
- Many value commitments have become more binding over the implementation
period
- Commitments are gradually becoming more binding—The percentage
of volume and value commitments being filled has increased over
the implementation period, as permitted subsidy levels declined
and world prices fell.
- Many countries “roll over” unused subsidies—High world grain
prices in 1995 and 1996 kept countries' export subsidies below
their commitments. Some countries carried over unused portions
of their commitments. Lower world grain prices may lead countries
to apply unused portions against overruns in later years.
Source Data
More remains to be done: Use of export subsidies
declined from pre-Uruguay Round levels. However, some countries
could increase use of subsidies from current levels. Further
progress in trade liberalization depends on continued reductions
or elimination of export subsidies. |
Data source: WTO export subsidy notifications.
Return to Three pillars,
Increase Market Access, Reduce
Export Subsidies, or Reduce
Domestic Support
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