Reforming the WTO Legal Order for Agricultural Trade: Issues for European Rural Policy in the Doha Round

Abstract

AbstractEuropean farm policy has undergone radical change in recent years, culminating in the Agenda 2000 reforms to the Common Agricultural Policy agreed in 1999 and then their Mid-Term Review in 2003. In particular, subsidy payments have been substantially ‘decoupled’ from production and switched decisively towards providing income support for farmers under a new ‘single farm payment’ scheme. These reforms have been predicated upon the need to win acceptance for Community farm subsidies in the Doha Round of WTO negotiations. This article examines the new law of the Common Agricultural Policy against the background of the domestic support reduction commitments contained in the 1994 Uruguay Round Agreement on Agriculture. It questions the extent to which the single farm payment scheme fulfils the requirements for ‘green box’ exemption from such commitments. Options for the re-negotiation of the Agreement on Agriculture are discussed, including measures to improve the justiciability of its terms and to exclude discriminatory and trade-distorting domestic support. The article also considers the implications of the recent WTO Appellate Body Decisions inUnited States—Subsidies on Upland Cotton and European Communities-Export Subsidies on Sugar. It concludes that the Community will have difficulty gaining acceptance for its reforms among WTO Members. Whatever the legitimacy of its subsidy regime within the framework of the current Agreement on Agriculture, the emergence of a strong negotiating position among developing countries, posited on opposition to the volume of farm support maintained by the Community and United States, may present even greater obstacles to the conclusion of a new Agreement on Agriculture in the Doha Round.