The World Trade Organisation Agreement on Agriculture (Domestic Support) Regulations 2020: Understanding its Impact on Global Agriculture Trade
The World Trade Organisation (WTO) has recently updated its regulations on agriculture, specifically on domestic support. The WTO Agreement on Agriculture (AOA) was introduced in 1995 and aimed to reform global agriculture trade practices. The AOA focused on three main pillars, namely, market access, export competition, and domestic support. The domestic support pillar aims to provide a framework for regulating government support to farmers, with the goal of reducing trade distortions and improving global market efficiency.
The WTO Agreement on Agriculture (Domestic Support) Regulations 2020 builds on the previous agreement, bringing it in line with current global agriculture practices. The updated regulations primarily aim to reduce trade distortions by placing limits on the amount of domestic support that WTO member states can provide to their respective agriculture sectors.
The biggest change introduced by the 2020 regulations is the reduction in allowable domestic support. Previously, WTO member states were allowed to provide up to 10% of the value of their agricultural production in domestic support. This has now been reduced to 5%, with a further reduction to 4% expected by 2024. This reduction in domestic support is expected to have a significant impact on global agriculture trade, particularly in developing countries, where agricultural subsidies have historically been higher.
The WTO Agreement on Agriculture (Domestic Support) Regulations 2020 also includes some new provisions aimed at promoting food security in developing countries. These include provisions for the protection of small-scale farmers and the promotion of agricultural research and development. The regulations also require developed countries to provide technical and financial assistance to help developing countries implement the new regulations.
The implementation of the updated regulations is expected to be a lengthy process, with WTO member states given until 2025 to comply. While the reduction in domestic support may be challenging for some countries, it is expected to improve global market efficiency and reduce trade distortions, ultimately benefiting both producers and consumers.
Overall, the World Trade Organisation Agreement on Agriculture (Domestic Support) Regulations 2020 is a positive step towards a more efficient and fair global agriculture trade system. By reducing domestic support, the regulations aim to promote market efficiency, reduce trade distortions, and ultimately benefit both producers and consumers. With a focus on promoting food security in developing countries, the updated regulations demonstrate the WTO`s commitment to fair and sustainable global agriculture trade practices.