WTO Progress Demands Domestic Support Accountability

By Shannon Schlecht
Member countries of the World Trade Organization (WTO) have about nine months to develop a “work plan” or agenda for negotiations following the WTO ministerial conference last December. Even with a deadline and process in place, we have concerns that a few recalcitrant members could drag multilateral trade progress to a near stop by not acknowledging the many changes that have occurred over the past decade.

For example, several countries are not meeting their obligation under the Uruguay Round to notify WTO of their domestic agricultural support levels. A March 2014 WTO Agriculture Secretariat report showed that only 42 percent of domestic support notifications have been submitted, much lower than for reporting on market access at 86 percent and export competition at 61 percent. The process needs much more transparency to move forward in the agricultural pillars of domestic support, export competition and market access with a shared goal to begin making trade-offs on reducing domestic and export subsidies while increasing market access.

"It is essential that our work in these areas is well-informed by the latest data,” said Deputy U.S. Trade Representative Michael Punke at a recent WTO Trade Negotiations Committee meeting. “We must understand who is subsidizing today and how. This starts with required and, in many cases, long-overdue notifications. Members who clamor for progress in Doha but fail to meet this basic obligation will have little credibility."

India and Turkey are among the worst offenders. India’s last WTO notification about its domestic agricultural support level covered for 2003 while Turkey has not reported support spending on a crop since 2001. A look at the publicly available information provides a compelling case for why these countries do not want to share that information. A recent Cairns Group study indicated that India doubled its trade distorting between 2001 and 2008 from $8.2 billion to $16.4 billion. A 2011 DTB Associates report illustrated that Turkey is also vastly exceeding its WTO commitments on trade distorting domestic support.

Specifically for wheat, India and Turkey have significantly increased minimum support prices for their farmers since the Doha Round was launched (see charts). It is a remarkable change and needs to be taken into account if the WTO negotiating arm is to move ahead for agriculture. It is helpful to compare their support levels to a freely reported U.S. wheat target price that has changed little since 2001. The Cairns Group study found that U.S. trade distorting support fell roughly one-third from 2001 to 2011 while EU support fell by 71 percent.   

USW remains committed to multilateral negotiations under the WTO and encouraged by the increasingly loud call to improve transparency and provide a clear picture of actual world agricultural policies. Only then will the WTO be able to make meaningful progress toward reducing trade barriers and increasing market access for all its member countries.

Source: U.S. Wheat Associates