Strengthening African Agricultural Trade: The Case For Domestic Support Entitlement Reforms

In the build up to the World Trade Organization’s (WTO) twelfth Ministerial Conference at the end of 2021, WTO members are again considering how best to reform domestic support (subsidies) to agriculture.

This has long been a vexed issue in the organization, and its predecessor, the General Agreement on Tariffs and Trade. Since the successful, but partial, reforms introduced by the Agreement on Agriculture at the conclusion of the Uruguay Round of multilateral negotiations, there has been limited progress. Given the broader problems besetting the WTO now, ambitions for meaningful domestic support reform have to be tempered to prevailing political realities.

One relatively promising area for reform is to address WTO members’ entitlements to deploy domestic support, rather than aiming to cut actual expenditures per se. Specifically, reducing entitlements would diminish members’ rights to increase domestic support payments in future. Such reductions are best targeted at those subsidies that distort trading partners’ production and trade incentives, rather than at subsidies generally regarded as either relatively benign, or minimally distorting to support domestic farmers and the agricultural economy.

READ WORKING PAPER 07

Authors:

Dessie Ambaw, Postdoctoral researcher at the Institute for International Trade (IIT)
Ken Ash, Independent Consultant, IIT Visiting Fellow, and former OECD Director of Trade and Agriculture
Peter Draper, Interim Head: School of Economics and Public Policy & Executive Director: Institute for International Trade
Hilton Zunckel, Managing Director at ‘Hilton Lambert - Practitioners of Trade Law

The views expressed here are the author’s alone, and do not represent the views of the Institute for International Trade.