Demystifying Blue Box Support to Agriculture Under the WTO: Implications for Developing Countries

Developing members at the WTO face a shrinkage in policy space for supporting their agricultural sector due to the limited room available under the provisions of the Agreement on Agriculture (AoA). Contrastingly, most developed members can provide high levels of product-specific support without breaching their commitments on account of their support entitlements. For some of these members, the so-called ‘Blue Box’ under the AoA, plays a pivotal role in expanding the policy space with respect to domestic support to agricultural products. Though a lot of scholarship has discussed and examined other support provisions under the AoA, the ‘Blue Box’ remains relatively shrouded in mystery. Testimony to this is the fact that although the Blue Box has found use amongst developed members, no developing member, except for China in 2016, has ever used the Blue Box to support their producers. Given the impasse in the Doha Round of negotiations and limited flexibilities available under the AoA, this paper examines the feasibility and compatibility Blue Box measures with developing members’ socio-economic situation. Findings of this paper bring to fore the variations in member practice and the operational flexibilities available in implementing Blue Box programmes to support agriculture. JEL: F13, F14, F17, Q17

Agriculture Subsidies: Unravelling the Linkages between the Amber Box and the Blue Box Support

Domestic support disciplines under the Agreement on Agriculture are controversial, to say the least. The aggregate measurement of support (AMS) restricts Members’ policy space to provide product-specific support. The structural flaws in the determination of AMS further compel Members to explore alternatives. In contrast to the Amber Box, the Blue Box offers certain flexibilities for Members to exempt product-specific support from AMS calculation. The Blue Box reflects several elements which are seemingly typical to the Amber Box, except that it has certain production-limiting features. This article explores the legal bounds of the Blue Box measures, and its similarities and dissimilarities with the Amber Box. Towards this end, the article builds on a fresh legal understanding of the Blue Box based on its negotiating history and interpretative bounds, and also offers a fuller appreciation of market price support (MPS) and non-exempt direct payments under the Amber Box. While the calculation methodology for non-exempt direct payments bears a close resemblance to the calculation of MPS, the article argues that direct payment and MPS measures are fundamentally distinct types of product-specific support which makes the interchangeability of Blue and Amber Boxes seemingly difficult.

COMPARISON OF INDONESIA'S EXPORT-IMPORT WITH CHINA AFTER THE AGREEMENT ON AGRICULTURE (AoA)

The agricultural sector is the most important sector in the Indonesian and Chinese economies. The role of this sector is not only in international trade activities, but also plays a role in the domestic economy, including food sufficiency. The agricultural policies of Indonesia and China are not only oriented to increasing agricultural productivity for trade purposes but also to improving the standard of living of the people, especially farmers. The flow of economic liberalization brought by the World Trade Organization (WTO) has become a dilemma for Indonesian and Chinese agriculture. On the one hand, the WTO accession decision opens access to wider international trade, but on the other hand, both countries must protect their agriculture through the determination of prices for agricultural products by the government. This paper aims to find out the comparison of Indonesia's exports and imports with China in the field of trade in agricultural products after the implementation of the Agreement on Agriculture (AoA) or agricultural agreements which are part of the WTO from January 1, 1995, to the present. The results of the study obtained that the comparison of Indonesia's exports and imports with China was more optimal. From the research results, it can be used as a comparison for the government in determining further policies to get maximum results.

Indian Agriculture under Open Economic Regime: Implication for Livelihood and Food Security

Despite impressive performance in terms of GDP growth after the introduction of neoliberal reforms, India continues to be the home of the largest number of hungry people in the world. The present paper is an attempt to understand two interrelated issues in this context: the impact of neoliberal reforms on agricultural development and the implication of an open economic regime on food security in India. The study reveals that the austerity measures introduced by the state in the form of decline in capital formation and public sector expenditure in agriculture have undermined the livelihood of the majority of the population in India. The implementation of the World Trade Organization’s Agreement on Agriculture along with the retreat of the state in the name of fiscal discipline has significantly reduced the bargaining power of the peasants in general and the food security of the majority of the population in particular.

WTO Agreement on agriculture and peculiarities of its implementation under the conditions of the Republic of Belarus

The article presents the stages of formation and development of the WTO Agreement on Agriculture, its structure and content of the main sections. It has been established that agriculture is one of the strategic and vulnerable sectors of the economy of any state, the development of which determines the level of national economic and food security. It is determined that the adopted document establishes a system of rules and obligations of countries in relation to agricultural policy measures related to the regulation of market access, domestic support, and export competition. The current trends in the development of the agri-food sector of Belarus in terms of agricultural production, food security, foreign trade are justified. The features of the implementation of the WTO Agreement on Agriculture in the conditions of the republic, taking into account external and internal factors of industry competitiveness, are highlighted. At the country level, directions for the development of agricultural trade policy, improvement of support measures that do not fall under obligations to limit in accordance with international requirements of the World Trade Organization, and ensure competitive advantages in foreign agricultural markets are proposed. It was noted that promising areas and criteria for the effective functioning of the agri-food sector should take into account national priorities, provide measures and mechanisms for the development of competitive and environmentally friendly production of agricultural products, expand market infrastructure, create favorable organizational and economic conditions for the functioning of the industry, and form its scientific and innovative potential. The issues disclosed in the article are of interest in developing a set of measures to increase the efficiency of foreign trade in the context of expanding the country’s participation in international and regional trade and economic integration, justifying mechanisms for improving agricultural regulation, and developing a system for promoting agri-food products on the domestic and foreign markets.

Introductory Note

In 2017 panel and Appellate Body reports were adopted in nine disputes. The disputes concerned alleged violations under the General Agreement on Tariffs and Trade of 1994 (GATT 1994), the Agreement on Sanitary and Phytosanitary Measures (SPS Agreement), the Agreement on Subsidies and Countervailing Measures (SCM Agreement), the Anti-Dumping Agreement, and the Agreement on Agriculture. Four of the disputes concerned restrictions placed on the importation of animal products (mainly poultry and pigs), such as licensing requirements and import restrictions, tariff rate quotas established following re-negotiations with principal suppliers, and SPS measures. The dispute over a ban on importation of pigs featured an important issue relating to the “regionalization” of SPS measures. Two disputes provided clarification as to the relationship between WTO agreements, in particular, the relationship between GATT 1994 and the Agreement on Agriculture. The year 2017 also saw another case in the “series” of the Airbus/Boeing subsidies disputes, with the United States scoring a victory over the European Union.