Improving WTO Transparency: Shadow Domestic Support Notifications

Measurement Issues and Analysis for Eight Countries—EU, US, Japan, Norway, Brazil, China, India and the Philippines
Mar 14, 2008 - 04:00 pm UTC to Mar 15, 2008 - 04:00 pm UTC

One of the fundamental achievements of the Uruguay Round of multilateral trade negotiations that established the World Trade Organization (WTO) in 1994 was to create the first multilateral framework for disciplines on domestic farm support. However, compliance with international rules must be monitored and the WTO rules for support notifications have proven lax.

Given the dearth of formal notification reports, and the controversies that surround the classification of certain subsidies or assessment of their effects, an up-to-date set of estimated subsidy notifications will provide a valuable contribution to agricultural policy deliberations.

This conference provides such an assessment of domestic support and its potential notification to the WTO for eight countries. An overview paper provides common background and discussion of the domestic support notification rules, related economic and legal issues, possible outcomes of the Doha Round negotiations, and other assumptions underlying projections of future notifications. Each country paper then has the following general design:

Brief synopsis of domestic support types and levels in the country and their relative importance compared to tariff protection and export subsidies.
Replication of the most recent official WTO domestic support notifications to confirm that the data and procedures applied in the initial estimates from the project are consistent with past government decisions.
Construction of shadow notifications from the date of coverage of the last official notifications through at least 2005.
Comparison of the calculated shadow notifications to the limit commitments of the country and discussion of the results.
Discussion of a set of relevant alternative support-definition scenarios, their effects on the calculated levels of support, and whether limit commitments would have been binding if these alternative definitions had been applied in the historical period of analysis.
A preliminary assessment of projected domestic support notifications through 2013.
Parts 1-4 complete a basic description and analysis of the recent domestic support. Parts 5 and 6 provide analysis relevant to a possible Doha Round implementation period and a basis for a longer-term analysis and assessment by the authors. Broadly, in considering the future there will be different production levels and prices, and therefore expenditures for various support programs. There may be different WTO subsidy constraints, such as those being negotiated in the Doha Round. There is room for re-legislating policy instruments to meet WTO classification criteria and also for challenges to those classifications. These are the issues that are considered for each country.