Farm Subsidies: Exporters Quiz EU

17 March 2010

EU agriculture policies came under scrutiny last week at the year's first meeting of the WTO's regular committee on agriculture. Exporting countries quizzed the EU on its subsidy spending at the 10 March gathering, including on new data on farm support recently released by the trade bloc.

Australia questioned the methods used by the EU to revise its export subsidy commitments to factor in the addition of new members, on the basis that this could lead to weaker commitments from the bloc. Successive enlargements have seen the EU grow from 15 to 27 member states since 1995; however, the WTO membership has yet to approve a new schedule of tariff and subsidy commitments for the growing bloc.

in response, the EU argued  that revised commitments for export subsidies should not be calculated by simply adding the previous levels to those of its new members, since trade with many of the new states should now be classified as within the Union.

Australia, Brazil, and Thailand - three of the world's main sugar exporters - objected to the EU's recent decision to export an additional 500,000 tonnes of "out of quota" sugar, which they believe are above quota limits established by the WTO. The three states, which are involved in disputes with the EU brought to the WTO (cases DS265, DS266, and DS283), had recently condemned the EU moves, which they believe have depressed world prices. The EU maintains that the sugar is not subsidised and that the additional exports are temporary.

Australia and Canada also posed  questions about how spending by the EU met the WTO's criteria for green box subsidies - support that is exempt from an overall ceiling or any cuts because, ostensibly, it does not result in more than minimal trade distortion.

Australia also queried why a number of countries are substantially behind in officially notifying their subsidy spending to the WTO, and noted in particular delays by Venezuela, Egypt, Korea, Turkey and China. Of the 153 member states, 81 countries have yet to provide data for 2004 or earlier. Australia urged members to keep this data current, inquiring about the reasons for backlogs of up to eight years for some states.

The next meeting of the regular committee on agriculture is scheduled for 23 September.

ICTSD reporting; "WTO members behind in providing farm subsidy data," REUTERS, 10 March 2010.

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