Trade-distorting Farm Support Continues to Fall Steadily, EU Says

Bridges, ICTSD

12 November 2015

New figures notified by the European Union to the WTO indicate that the bloc’s agricultural trade-distorting domestic support in marketing year 2012-2013 continued to fall to low levels.

The most heavily trade-distorting support – dubbed “amber box” support at the WTO – fell gradually to just under €6 billion, around €1 billion less than in the previous marketing year that was notified. (See Bridges Weekly, 30 October 2014)

However, successive policy reforms mean this figure has approximately halved since 2006-7, as the EU has sought to move away from production-linked payments and towards decoupled income support.

Brussels also reported that it provided around €1.7 billion in trade-distorting payments that were classed as “de minimis,” under a WTO clause that allows the bloc to provide this support up to a ceiling of 5 percent of the value of production.

According to the data, the EU also provided €71 billion in “green box” payments – which under WTO rules must not cause more than minimal trade distortion. Of this, decoupled income support continues to represent the lion’s share at €33 billion. The EU also reported significant green box spending on investment aid and on environmental programmes, which accounted for €6.6 billion and €8.9 billion, respectively.

The EU also reported that it provided less than €3 billion in production-limiting blue box payments, which are allowed without limits under current WTO rules.

The latest figures suggest that the bloc’s overall trade distorting support – the sum of amber box, blue box, and de minimis – amounts to €10 billion.

The EU continues to provide relatively high levels of support to specific products such as skimmed milk powder at €1.1 billion and butter at €2.7 billion.

The full notification (G/AG/N/EU/26) is available online here: https://docs.wto.org.

ICTSD reporting here Trade-distorting Farm Support Continues to Fall Steadily, EU Says

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