Australia Notifies WTO Regarding Level Of Farm Subsidy Spending in 2003-2004

GENEVA--Australia has notified the World Trade Organization of its farm subsidy spending for the 2003-2004 marketing year.

According to the notice circulated to WTO members May 23, Australia spentA$207.77 million ($157.8 million) during that period on trade-distorting 'amber box' domestic support, well below its A$471.86 million ($358.4million) annual spending cap. The amber box spending was slightly below theA$212.77 million spent during the previous 2002/2003 marketing year.

All of Australia's reported amber box support was allocated to the dairy sector. A further A$1.4 million of product-specific support for sugar andA$1.2 million for wheat was exempted from the amber box under to so-called 'de minimis' rule, as was A$1.18 million in non product-specific domestic support

Under the Agriculture Agreement's de minimis rule, developed country WTO members may exempt trade-distorting domestic subsidies equivalent to 5 percent of total agricultural production from their amber box spending limits for both product-specific and non product-specific support.Australia's total agricultural production in 2003-2004 stood at A$36.7 billion.

Australia also notified A$1.99 billion ($1.51 billion) in 'green box'domestic support for agriculture for 2003-2004, slightly above the A$1.94 billion spent the previous marketing year.

The green box covers support programs considered to have little or no impact on trade and includes measures such as agricultural research, disease control, and environmental protection programs, regional assistance programs, restructuring aid, and certain forms of direct payments to farmers that are not linked to the type or amount of a crop being grown.

Green box spending is exempted from WTO spending caps.

Doha Round Significance

Australia is a leading member of the 17-strong Cairns Group of agricultural exporting nations, which has been demanding steep cuts in trade-distorting support as well as new, tighter disciplines on green box spending as part of a future Doha Round agreement on agriculture.The main target of the Cairns Group has been the European Union and, to a lesser extent, the United States. The EU spent a total of 43.65 billion euros on amber box support during the 2000-2001 marketing year (compared to its 67.16 billion WTO spending cap), while U.S. spending was $14.4 billion in the 2001 marketing year (compared to a $19.1 billion spending cap). The EU reported 21.84 billion euros in green box spending for the 2000-2001 marketing year, while U.S. spending on green box measures totaled $50.67 billion in 2001.

Neither the EU nor the United States have submitted farm subsidy notifications to the WTO for beyond 2001. The next U.S. notification will be closely examined by WTO members as it will incorporate increased agricultural spending commitments under the 2002 Farm Security and Rural Investment Act.

A U.S. official told BNA that the notification for the 2002 marketing year was currently being prepared as part of an inter-agency process but that no time frame has been fixed for submitting it to the WTO.