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Wto Agreement On Agriculture Blue Box

At present, the blue box is a permanent provision of the agreement. Some countries want it to be abolished because payments are only partially decoupled from production, or they are proposing commitments to reduce the use of these subsidies. Others argue that the blue box is an important tool for supporting and reforming agriculture and achieving certain non-trade-related objectives, arguing that it should not be restricted as it distorts trade less than other types of support (see non-trade concerns). The EU says it is ready to negotiate further reductions in support for orange boxes as long as the blue and green box concepts are retained. This is the orange box with conditions designed to reduce distortion. Any aid that would normally be included in the yellow box will be placed in the blue box if the aid also obliges farmers to limit production (details under Article 6(5) of the Agreement on Agriculture). The aggregate measure of support (AMS) would be reduced by 60% compared to the final limit levels over 5 years (40% over 10 years for developing countries). Unlike the Uruguay Round agreement, there would also be separate ceilings for support for certain products: the averages for 1999-2001. Almost all domestic support measures, which are considered distortions of production and trade (with a few exceptions), fall into the yellow box, which is defined in Article 6 of the Agriculture Agreement as all national means of support, with the exception of the blue and green boxes. These include price support measures or subsidies directly linked to production volumes. While the “green box” is roughly translated into a green “go” signal and the orange could be considered a warning light, there is no red box. Instead, the WTO has invented a “blue box” that is used for what the organization sees as production-limiting programs. These agreements contain flexibility in implementation by developing countries, WTO Members (special and differential treatment) as well as least developed countries (DDCs) and net food-importing developing countries (special provisions).

The 1958 Haberler Report stressed the importance of minimising the impact of agricultural subsidies on competitiveness and recommended replacing price support with additional direct payments that are not linked to production, anticipating the discussion of Green Box subsidies. It is only recently, however, that this change has become the heart of the reform of the global agricultural system. [1] At the pre-GATT 1986 Ministerial Conference in Punta del Este, Uruguay, agricultural lobbies in industrialized countries strongly opposed compromises on agriculture. In this context, the idea of exempting “trade-neutral” production and subsidies from WTO obligations was first proposed by the US in 1987 and quickly repeated by the EU. [2] By guaranteeing farmers continued support, it has also neutralised resistance. In exchange for the inclusion of agriculture in WTO disciplines and a commitment to reduce trade-distorting subsidies in the future, developed countries would be allowed to maintain subsidies that result in “minimal trade distortions” in order to achieve various public policy objectives. [1] The agreement has been criticised by NGOs for dividing subsidies into trade-distorting domestic subsidies (the “orange box”), which must be reduced, and non-trade-distorting subsidies (blue and green boxes), which can escape discipline and therefore be increased. While efficient agricultural exporters are urging WTO members to reduce their support for the trade-distorting “orange box” and “blue box,” developed countries` spending on green boxes has increased. The WTO Observatory says opponents of the blue box want it abolished because payments are only partially decoupled from production, or they want a deal to reduce the use of these subsidies.

“Others say the blue box is an important tool for supporting and reforming agriculture and achieving certain `non-trade` objectives, arguing that it should not be restricted because it distorts trade less than other types of support.” Domestic support systems in the agricultural sector are governed by the Agreement on Agriculture, which entered into force in 1995 and was negotiated in the Uruguay Round (1986-1994). .