Bridges Trade BioRes • Volume 5 • Number 11 • 10th June 2005

WTO Agriculture CTTE Takes up Green Box

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WTO Members on 30 and 31 May re-started talks on exemptions to agricultural liberalisation commitments under the “Green Box” during informal negotiations of the Committee on Agriculture. Although WTO Members are in general required to reduce agricultural subsidies under the Agreement on Agriculture (AoA) and the reduction commitments that are currently being negotiated, Annex 2 says that some subsidies can be exempted if they fall into the green box requirements of not distorting trade (or at most causing minimal distortion), being government-funded, not involving price support and not being targeted at particular products. They include direct income supports for farmers and environmental protection and regional development programmes. There are two divergent views on the scope of the review of the Green Box as mandated in the Doha negotiations, with Members such as the EC and the G-10 group of developed country advocates for exemptions from liberalisation looking at it as just a “health check” while others think that the scope is broadly whether or not the policy criteria set out in the box meet the objective of the box.

In a paper presented at an informal consultation on 31 May, which in turn was based on discussions on 30 May, Canada suggested a number of detailed amendments to ensure that the exempted subsidies do not distort trade. In negotiations, Canada and the G-20 group of developing country advocates of special and differential treatment for developing countries said that some of the programmes currently exempted by the green box might, in contradiction to its objectives, distort trade. In addition, on 2 June, the G-20 introduced a new paper that aims to exclude trade-distorting subsidies from the Green Box and also suggests a number of amendments aimed at providing special and differential treatment to developing countries. These include a suggestion to make sure that exempted direct payments to producers are not linked to production levels. Provisions aimed specifically at helping developing countries include a change to ensure that exempted income support is provided only to low-income producers; an exemption for subsidies for land reform in developing countries; a call to give developing countries more flexibility in deciding what sort of income insurance or support after natural disasters could be exempted under the green box; and an exception from some of the more stringent criteria for exempting payments made under regional assistance programmes. However, as it was introduced after the negotiations, the G-20 proposal was not negotiated on and will be discussed later.

ICTSD Reporting.