The Regulation of Agricultural Subsidies in the World Trade Organization Framework. A Developing Country Perspective
(Sprache: Englisch)
The Agreement on Agriculture (AoA) was adopted to eliminate the illegitimate use of trade distorting agricultural subsidies and, thereby, reduce and avoid the negative effects subsidies have on global agricultural trade. However, the AoA has been fashioned...
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The Agreement on Agriculture (AoA) was adopted to eliminate the illegitimate use of trade distorting agricultural subsidies and, thereby, reduce and avoid the negative effects subsidies have on global agricultural trade. However, the AoA has been fashioned in a way that is enabling developed countries to continue high levels of protectionism through subsidization, whilst many developing countries are facing severe and often damaging competition from imports artificially cheapened through subsidies.The regulation of subsidies by the World Trade Organisation (WTO) has been a highly sensitive issue. This is mainly due to the fear of compromising on food security, especially by developed countries. Developing countries have suffered negatively from the subsidy programmes of developed countries, which continue to subsidize their agricultural sector. This position of developing countries in the global trade system, which has been described as weak, has drawn criticism of the WTO, namely that it does not protect the interests of the weak developing nations, but rather strengthens the interests of the strong developed nations.
The green box provisions which are specifically designed to regulate payments that are considered trade neutral or minimally trade distorting have grossly been manipulated by developed countries at the mercy of the AoA. Developed countries continue to provide trade distorting subsidies under the guise of green box support. This is defeating the aims and objectives of the AoA.
The study examines the regulation of WTO agricultural subsidies from the developing countries' perspective. It looks at the problems WTO member states face with trade distorting subsidies, but focuses more on the impact these have on developing states. It scrutinizes the AoA's provisions regulating subsidies by adopting a perspective to identify any loopholes or shortcomings which undermine the interests and aspirations of developing countries. This is against the background
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that some of the provisions of the AoA are lenient towards the needs of developed countries at the expense of developing countries.
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Text Sample:Chapter 2 6 THE IMPACT OF THE AOA ON DEVELOPING COUNTRIES:
The main objective of the AoA is to establish a fair and market-oriented trading system in agriculture, to increase market access and reduce trade-distorting agricultural subsidies. However it is argued that the agreement has not met these expectations. It has been described as flawed and highly iniquitous; and that instead of levelling the playing field in international trade in agriculture, it is strengthening the monopoly control of developed countries over global agricultural production and trade. The agreement is not balanced and fair as it is mainly skewed in favour of developed countries' interests. Its provisions on market access, domestic support and export subsidies basically enhance measures used by developed countries to protect their markets and agriculture.
The concept of free trade which underpins the trade liberalization commitments in the AoA works against the development and food security needs of developing countries. Under free trade, countries should produce only the goods which they can produce cheaply or on which they have comparative advantage and import those goods including the food crops which they produce domestically, from others who can produce them cheaper and more efficiently. The implication of this is that developed countries, by virtue of their huge subsidies will end up dumping food products in developing markets. Thus, developing countries end up becoming more dependent on artificially cheapened imports that continue to drain their limited foreign reserves, retard the growth of their agriculture and economies and weaken their capacity to feed their own population in the long-term.
It is argued that the AoA mainly focuses on further opening the markets of developing countries whilst it continues protecting the subsidies and protectionist measures such as tariff peaks and other trade barriers used by developed countries. Trade, which is a core principle of
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the WTO and which purportedly, directs the trade liberalization commitments of members has been rendered meaningless. In fact, it has misled many developing countries to quickly open up their markets to dumped imports from developed countries in order to gain access to the latter's huge markets. However the actions of developing countries are not "reciprocated" by equally aggressive steps in the developed world. Instead, developed countries continue to put higher tariff walls called tariff peaks and tariff escalation upon tariffication which is effectively discriminating against developing countries' exports.
Additionally, the subsidies employed by developed countries to protect their agriculture, expand their production and gain monopoly control in the international market are accorded more protection with the exemptions introduced in the AoA's subsidy reduction. The classification of subsidies into trade-distorting, which are subject to reduction discipline and non-trade distorting, which are not, permits the developed countries to shift their existing grossly huge subsidies into acceptable boxes or categories that are exempted from subsidy reduction. The exemptions applying to developing countries are often of not much use, considering the long-running negative economic position of many developing countries. In the end, it can be argued that with such huge loopholes, the AoA clearly aids to legitimize and strengthen the trade-distorting practices of developed countries.
It is also argued that the AoA is not fair because it prohibits developing countries from using the same tools that enabled developed countries to pursue their development and food security goals in the past decades. Furthermore developed countries are allowed to retain and even expand their huge agricultural subsidies whilst developing countries are prohibited from increasing their subsidies beyond the de minimis level. Prospects are high that they will not be allowed to use any export subsidy
Additionally, the subsidies employed by developed countries to protect their agriculture, expand their production and gain monopoly control in the international market are accorded more protection with the exemptions introduced in the AoA's subsidy reduction. The classification of subsidies into trade-distorting, which are subject to reduction discipline and non-trade distorting, which are not, permits the developed countries to shift their existing grossly huge subsidies into acceptable boxes or categories that are exempted from subsidy reduction. The exemptions applying to developing countries are often of not much use, considering the long-running negative economic position of many developing countries. In the end, it can be argued that with such huge loopholes, the AoA clearly aids to legitimize and strengthen the trade-distorting practices of developed countries.
It is also argued that the AoA is not fair because it prohibits developing countries from using the same tools that enabled developed countries to pursue their development and food security goals in the past decades. Furthermore developed countries are allowed to retain and even expand their huge agricultural subsidies whilst developing countries are prohibited from increasing their subsidies beyond the de minimis level. Prospects are high that they will not be allowed to use any export subsidy
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Autoren-Porträt von Farai Chigavazira
Farai Chigavazira is an Associate Legal Practitioner (Attorney) at Wintertons, where he devotes 80 percent of his practice to corporate, commercial, compliance, regulatory risk management matters, and International Trade law. He has experience in drafting commercial contracts, due diligence, and compliance. He joined Wintertons in 2016 from the Law Society of Zimbabwe, where he worked in the Regulation and Compliance department. He holds a Bachelor of Laws (LLB) and a Master of Laws (LLM) from the University of Fort Hare in South Africa.
Bibliographische Angaben
- Autor: Farai Chigavazira
- 2016, 212 Seiten, Masse: 15,5 x 22 cm, Kartoniert (TB), Englisch
- Verlag: Anchor Academic Publishing
- ISBN-10: 3960670591
- ISBN-13: 9783960670599
Sprache:
Englisch
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