Agriculture Reference
In-Depth Information
mestic subsidies according to the degree of 'trade distortion' they imply. A para-
doxical consequence of this is that as a hampion of deregulation, the WTO has
found it needs to invent complicated new vocabularies and legalistic procedures
in order to ahieve its objective.
These outcomes have been particularly invidious for the efficiency and equity
of the global food system. By allowing the world's rih nations to persist with high
levels of agricultural support, the AoA exposed developing countries to subsidized
agricultural imports from Europe and the US, thus undercuting the competitiveness
of local production (a problem of market distortion), and also restricted their ability
to sell agri-exports into affluent developed countries (a problem of market access).
The net result of these processes was to generate the perverse situation where food-
secure Northern countries further expanded their production of basic food staples
(wheat, rice, maize etc.) and relatively food-insecure Southern countries swithed to
luxury, high-value crops (tropical fruits, loriculture etc.) (Fold and Prithard, 2005).
Hence, the net effect of the WTO was to institutionalize a set of imbalances in the
global agri-food trade.
The WTO's incongruities sit uneasily both within and outside the organization.
Its defenders emphasize its role in enshrining international rules in agricultural
trade, and working towards liberalization. Yet both these arguments contain con-
tradictions. The WTO upholds the AoA - yet, as already discussed, this is a flawed
agreement, and one that has had very limited success with regards to progressing
agricultural trade liberalization. Developed country members have met their AoA
obligations by hook or by crook, and, in a number of instances (including subsidies
to European sugar producers and US coton growers), only ater the WTO has been
forced to rule against these countries in lengthy, high-proile dispute setlement
cases. Even then, after rulings have gone against Northern subsidies, subsequent
'box-shifting' initiatives have muddied the waters and it is not clear at all that devel-
oping countries have benefited. Indeed, after fifteen years of existence, there is only
one instance of a substantial, multilaterally-endorsed decision to liberalize beyond
the frames of the AoA. This occurred at the Hong Kong WTO Ministerial meeting of
2005, when members agreed to wholly eliminate export subsidy payments by 2013.
As earlier noted, the highly distortive nature of these payments means this form of
subsidy can wreak havoc on markets, and so their elimination was universally wel-
comed. However, as Oxfam noted at the time, because these subsidies actually form
