The regulation of agricultural subsidies in the world trade organization framework: a developing country perspective

Abstract

The Agreement on Agriculture (AoA) was adopted to eliminate the illegitimate use of tradedistorting 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 in the World Trade Organisation (WTO) has been a highly sensitive issue. This is mainly due to the fear of compromising food security especially by developed countries. Developing countries have suffered negatively from the subsidy programmes of developed countries who continue to subsidize their agricultural sector. This position of the developing countries in the global trade system which has been described as weak, has drawn criticism that the WTO as it currently operates 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 has 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’ belvedere. 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 with a view to identify any loopholes or shortcomings which undermine the interests and aspirations of developing countries. This is behind the background that some of the provisions of the AoA are lenient towards the needs of developed countries at the expense of developing countries.