The EU’s Export Refunds on Processed Foods: Legitimate in the WTO?

Export subsidies on processed foods are an important trade policy instrument for the European Union. GATT Article XVI legitimised the use of export subsidies on primary agricultural products, under certain circumstances, but forbade the use of export subsidies on non-primary products. However it was never satisfactorily resolved whether export subsidies could be paid on the primary agricultural products incorporated into processed products, such as pasta. The Uruguay Round Agreements, and particularly the Agreement on Agriculture (the URAA), apparently legitimised the EU’s practice of paying export subsidies on incorporated agricultural products, at least while the Peace Clause was in force. With the demise of the Peace Clause the question arises whether GATT Article XVI has any residual force, given that the range of primary agricultural products exempted by Article XVI from the ban on export subsidies is narrower than the list of agricultural products covered by the URAA.International Relations/Trade,

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Dirty Tariffication Revisited: The EU and Sugar

It is widely believed that a number of countries, including the EU, engaged in dirty tariffication during the Uruguay Round of trade talks. This article examines the EUÂ’s record on sugar and finds little evidence to substantiate the claim. However, world prices increased between the base period (1986-88) and the date of implementation (1995), and so tariffication resulted in an increase in the tax that would have been charged on sugar imports into the EU. As well, the Special Safeguard provisions meant that a substantial additional levy could be charged.agriculture, EU, sugar, tariffication, trade, International Relations/Trade,

Fruit and Vegetables, and the Role They Have Played in Determining the EU’s Aggregate Measurement of Support

In its periodic declarations of domestic support to the WTO, the EU has progressively reduced its amber-box declarations in line with its changing system of farm support. Surprisingly, however, in 2007/08 it managed to more than halve its amber box compared with that of the previous year, easily achieving the reduction targets being touted in the Doha Round. This was largely due to a change in the calculations for fresh fruits and vegetables. These had been linked to the entry price system, which was not affected by the 2008 fruit and vegetables reform. Why the EU chose to make this change during the ongoing Doha Round negotiations remains unclear.amber box, CAP, fruit, vegetables, WTO, Agricultural and Food Policy, Crop Production/Industries, Demand and Price Analysis, International Relations/Trade, Political Economy, Productivity Analysis,

The bond scheme

Under the bond scheme, a pre-determined series of payments would compensate farmers for lost revenues resulting from policy change. Unlike the Single Payment Scheme, payments would be fully decoupled: recipients would not have to retain farmland, or remain in agriculture. If vested in a paper asset, the guaranteed, unencumbered, income stream would be similar to that from a government bond. Recipients could exchange this for a capital sum reflecting the net present value of future payments, and reinvest in other business ventures, either on- or offfarm.With a finite, declining flow of payments, budget expenditure would reduce, releasing funds for other uses

EXPLAINING THE HEALTH CHECK:THE BUDGET, WTO, AND MULTIFUNCTIONAL POLICY PARADIGM REVISITED

Three potential explanations of past CAP reforms have been identified in the literature: a budget constraint, pressure from GATT/WTO negotiations or commitments, and a paradigm shift emphasising agriculture’s provision of public goods. The presentation, content and context of the Health Check reform proposals of 2007/08 are assessed. The proposals are probably more ambitious than first supposed. The Health Check was not primarily driven by budget pressures; the European Commission’s wish to adopt an offensive negotiating stance in the closing phases of the Doha Round was a more likely explanatory factor. The EU’s response to the commodity price spikes in 2008, and its Health Check proposals, suggest that the supposed switch from a state-assisted policy paradigm to the multifunctional paradigm is more apparent than real. The shape and purpose of the CAP post- 2013 is contested, with quite divergent views among the Member StatesHealth Check, CAP Reform, WTO, Doha, paradigm change, multifunctional, Agricultural and Food Policy, International Relations/Trade, Political Economy, F13, Q17, Q18,

European Union: Shadow WTO agricultural domestic support notifications

"The notification of the level of domestic support to the World Trade Organization (WTO) is intended to reflect compliance with obligations entered into at the time of the Uruguay Round. WTO members have often been slow to provide notification of domestic support levels. This makes the process of notification less useful as an indicator of the degree to which changes in policy have or have not benefited the trade system as a whole and exporting countries in particular. The notification of domestic support in the E.U. illustrates the value of a measure that reflects current policies and can therefore act as a basis for negotiation of further disciplines where these are necessary. The E.U. has made major changes in its Common Agricultural Policy (CAP) over the period since 1992 when the MacSharry reforms were implemented. Payments originally notified in the blue box (related to supply control) have over time been changed until in their present form they are unrelated to current production or price levels, and hence can satisfy the criteria for the green box. The E.U. has therefore much more latitude in trade talks to agree to reductions in the allowable trade-distorting support. This paper reproduced the E.U. notifications relating to 2003/04 and extends these with official statistics to the year 2006/07. It then projects forward the components of domestic support until the year 2013/14, based on forecasts of future production and estimates of policy parameters. The impact of a successful Doha Round is simulated, showing that the constraints envisaged in the WTO draft modalities document of May 19, 2008, would be binding by the year 2013, at about the time the next budget cycle in the E.U. starts. Without the Doha Round constraints, further reform might still happen for domestic reasons, but the framework provided by the WTO for domestic policy spending would be less relevant. In that case, much could hinge on the legitimacy of the Single Farm Payment system under the current rules governing the green box." from authors' abstractAgricultural policies, WTO Doha round, WTO compliance, notification of domestic support, India agricultural support policies, Globalization, Markets, CAP,

Decoupling EU Farm Support: Does the New Single Payment Scheme Fit within the Green Box?

Recent reform of the EU's Common Agricultural Policy (CAP) has led to a further decoupling of farm support. The EU believes that the new Single Payment Scheme, which replaces the former system of area and headage payments to farmers, tied to production, will qualify for green-box status in the WTO. We examine this contention, particularly in light of the recent WTO panel report on upland cotton.decoupling, EU, green box, Single Payment Scheme, WTO, Agricultural and Food Policy,