Why the US and EU offers to slash their agricultural trade distorting supports are empty

In this period of hibernation of the Doha Round negotiations at the WTO, for the resumption of which the developing countries (DCs) are awaiting additional offers from the EU and US to reduce their domestic agricultural trade-distorting supports and agricultural tariffs, it is useful to demystify their actual capacity to do so, at least if they were to comply with the rules of the Agreement on Agriculture (AoA).

The 22 May 2006, Canada has circulated at the WTO a report on "Agriculture domestic support simulations" (JOB(06)/151) with this introduction: "Representatives of Australia, Brazil, Canada, China, the European Communities, Egypt, India, Japan, Kenya, Malaysia, Norway and the United States have undertaken a data simulation exercise on various reduction options for the Total AMS and the Base for the Overall Commitments, using information provided by the European Communities, Japan and the United States. This effort was based on assumptions and indicators agreed by these Members for purposes of this statistical exercise alone. It was undertaken without prejudice to the positions of the Members involved. These Members would now like to share the results of this simulation exercise, including the data, assumptions and results, with the WTO Membership as a whole".

From that date on most Members, the media and NGOs have based their comments and negotiations on these simulations, without understanding their huge flaws, which are underlined in the present series of short technical slips (of 1 to 2 pages) which propose alternative simulations.

The first Slips 1 to 6 show that the EU and US proposals are not even feasible for the base period 1995-00 of the Uruguay Round implementation period, years for which we have used the allowed AoA caps of 5% of the value of agricultural production (VOP) for the non-product-specific de minimis and blue box. At this stage we do not challenge the compliance of the blue and green box subsidies with the WTO rules.

The following slips will show that they are even less feasible for the years 2001 to 2012 since we will then use the US proposals to cap the de minimis and blue box at 2.5% of the VOP and the EU proposal to cap the de minimis at 1% of the VOP. We will also show that all the blue box and the green box (except most of the domestic food aid) are coupled and should be transferred to the amber box.

Outline
Slip 1