Trade-distorting farm subsidies must go: India-China

India and China have jointly submitted proposal to World Trade Organisation (WTO) calling for elimination of most trade-distorting farm subsidies by developed countries. These farm subsidies are known as known as Aggregate Measurement of Support (AMS) or ‘Amber Box’ support.

Significance of proposal

The proposal assumes importance in view for consideration of other reforms in domestic support negotiations in view of ongoing negotiations for upcoming 11th Ministerial Conference (MC) of WTO to be held in Buenos Aires (Argentina) in December 2017. It counters the efforts of some WTO member countries targeting subsidies given by developing economies to their poor farmers while letting the developed rich nations retain their huge farm subsidies. It argues that AMS have to be eliminated before any other reform in global farm trade can be taken up for consideration.

Features of Joint proposal

Under the AMS regime of WTO, farm subsidies provided by developed countries are over 50% and in some cases more than 100% of value of production concerned, while developing countries are forced to limit it within 10% of the value of production. It is resulting in a major asymmetry in the rules on global agricultural trade.
Developed countries like US, EU, Japan, Canada, Switzerland, and Norway continue to distort global farm trade by safeguarding their exclusive entitlements on AMS which they had secured in previous Uruguay Round of trade negotiations.
Developed countries are consistently providing trade-distorting subsidies to their farmers at levels much higher than ceiling applicable to developing countries. It counters the efforts by some countries to target the subsidies of the developing countries while letting the developed countries retain their huge farm subsidies.

Month: Current Affairs - September, 2017