Doha Round negotiations on the green box, and beyond1
Jonathan Hepburn and Christophe Bellmann
Introduction
The WTO Doha Round negotiations on green box subsidies1 were widely seen as having
‘stabilised’ by mid-2008, meaning that, after a long period of fine-tuning, the
compromise language proposed by the chair was being viewed by many as a realistic
basis for agreement. While some countries may still have specific concerns with
particular elements, a broad consensus on the modifications to be made had emerged.
For much of 2007 and 2008, negotiators had focused primarily on a limited number of
issues, with particular attention being devoted to defining the exceptional circumstances
under which governments might be allowed to update the ‘fixed and unchanging’ base
periods they use to determine the amount of direct payments they provide to their
producers. However, as recently as 2006, Members were concerned about a far wider
array of issues, many of which have not found reflection in the likely Doha outcome. The
draft ‘modalities’ text circulated that year by the chair of the agriculture negotiations
bears witness to the heterogeneity of demands for reform that were on the table. While
many negotiators admit that their country has decided to drop some of these proposals in
the interests of obtaining a Doha Round agreement, there is reason to believe that many
of the underlying concerns remain.
Further back still, a wide range of ideas, concerns and proposals were discussed by
Members. The ‘overview’ document2 prepared in December 2002 by the chair of the
agriculture negotiations includes a summary of Members’ proposals and statements on
the green box, and gives some idea of the breadth of issues that were under consideration
at that time. The document indicates that Members had put forward numerous proposals
that did not find their way into subsequent draft modalities documents circulated by the
chairs of the agriculture negotiations: these included, for example, various proposals for
capping, reducing or eliminating different kinds of green box support; expanding the
green box to include ‘non-trade concerns’ such as animal welfare; or allowing developing
countries to include support to products representing less than a certain percentage of
world trade.
However, it is conceivable that countries and negotiating groups may at some future point
decide to raise issues that were set aside early in the negotiations. These could for
example be brought up again either in a subsequent round of multilateral trade talks, or as
part of a ‘built-in agenda’ of negotiations aimed at continuing a process that would
achieve the ‘long-term objective’ of agricultural trade reform. An assessment of the
recent negotiating history on the green box can therefore provide a guide to some of the
issues that may yet resurface in future talks.
1
This paper draws in part on earlier analysis prepared as a draft background paper for an ICTSD
dialogue held in Montreux, Switzerland, from 15-17 April 2007.
Negotiating mandates
The immediate negotiating mandate for work on the green box in the Doha Round was
provided by paragraph 16 of the July 2004 Framework, WT/L/579. This specified that:
"Green Box criteria will be reviewed and clarified with a view to ensuring that
Green Box measures have no, or at most minimal, trade-distorting effects or
effects on production. Such a review and clarification will need to ensure that the
basic concepts, principles and effectiveness of the Green Box remain and take
due account of non-trade concerns. The improved obligations for monitoring and
surveillance of all new disciplines foreshadowed in paragraph 48 below will be
particularly important with respect to the Green Box."
The mandate therefore aims to ensure, amongst other things, that green box measures
conform to the ‘fundamental requirement’ set out in paragraph one of the Agreement on
Agriculture3.
At the Hong Kong Ministerial in December 2005, Ministers then added that this review
should ensure that developing country programmes were also effectively covered by the
criteria4:
"... Green Box criteria will be reviewed in line with paragraph 16 of the
Framework, inter alia, to ensure that programmes of developing country
Members that cause not more than minimal trade-distortion are effectively
covered."
However, in the period prior to the agreement on the July 2004 Framework, Members
had already circulated a number of formal proposals and other informal submissions on
the green box. While there was no explicit mandate for work on the green box in the 2001
Doha Declaration that launched the current trade round, Members did agree to
“substantial reductions in trade-distorting support”; that “special and differential
treatment for developing countries shall be an integral part of all elements of the
negotiations”; and that “non-trade concerns will be taken into account in the negotiations
as provided for in the Agreement on Agriculture”. The early proposals on green box
support presumably were intended to contribute towards the achievement of some or all
of these objectives.
The Doha Declaration also “recognises” the work undertaken in the ‘built-in agenda’ of
negotiations under Article 20 of the Agreement on Agriculture5, “including the large
number of negotiating proposals” submitted by Members. Many of these related to the
green box. Even before the 1999 Seattle Ministerial, numerous proposals on the green
box had already been tabled, and at Members’ request were summarised in an October
2000 Secretariat document6.
Political dynamics and coalitions
The specific negotiating priorities of different WTO Members, as well as the coalitions in
which they have chosen to pursue them, have changed over the course of the Doha Round
and in the years leading up to its launch. While there are inevitably risks in attempting a
simplified description of political trends and groupings, a number of broad contours can
nonetheless be defined (see table 1, below).
Table 1: Main focus of proposals on the green box:
Tighten
disciplines to
ensure no tradedistorting effects
G-10
EU
US
Canada
Cairns Group
G-20
Developing country
like-minded group
African Group
Substantial new
flexibility for
developing
countries
Revise some
provisions to reflect
implementation
experience
Expand flexibility
to reflect new
‘non-trade
concerns’
x
x
x
x
x
x
x
x
x
x
x
x
x
Efficient agricultural exporters such as those in the Cairns Group have expressed
concerns about the extent to which green box programmes may be causing more than
minimal distortion to production and trade, and the possibility that existing green box
criteria may need to be tightened in order to ensure consistency with the fundamental
requirement set out in paragraph 1. A number of developing countries have also
expressed similar concerns, with the G-20 in particular emphasising these after its
formation in 2003. Both the Cairns Group and the G-20 have historically sought to
establish a cap or reductions on green box subsidies.
In contrast, members of the import-sensitive G-10 group of countries, which includes
Japan, Norway and Switzerland, have argued that there is only a limited mandate for
changes to the green box. They have emphasised the role of green box programmes in
addressing countries’ ‘non-trade concerns’, and have argued that agriculture has a
‘multifunctional’ role in delivering other public goods in parallel.
The EU and US have also resisted substantial reform of the green box. The EU has taken
positions that are close to those espoused by the G-10, in the past suggesting that, if
anything, the green box should be expanded in order to take into account issues such as
animal welfare. Like Canada, however, the US has supported modest changes to the
green box to cover, for example, experience with implementing disaster relief
programmes.
A number of developing countries, including G-20 members and the African Group, have
consistently underscored the need for the green box to be amended so as better to reflect
developing countries’ concerns. Many have argued that the green box, in the form in
which it was devised during the Uruguay Round, primarily reflects developed country
programmes and is therefore ill suited for developing countries to use. They have pushed
for specific changes to rectify what they see as imbalances in the existing text.
Broadly speaking, the resistance of importing countries to many of the more far-reaching
proposals put forward by exporting countries, combined with the resistance of the latter
to any dramatic expansion of the green box to address additional ‘non-trade concerns’,
has meant that the negotiations have in the end focused relatively heavily on
modifications aimed at providing greater flexibility to developing countries.
Likely outcomes of the green box negotiations
The July 2008 draft modalities text provides a fairly good idea of what the ultimate
outcome of the green box ‘review and clarification’ can probably be expected to entail,
assuming that no new issues are introduced at this stage in the negotiations. Five major
areas can be identified:
1. a new sub-paragraph 2(h) on ‘general services’ covering an additional set of
developing country policies and services;
2. under paragraphs 3 and 4 on public stockholding for food security and domestic
food aid, developing countries would be granted additional flexibility for
purchases from low-income and resource-poor producers;
3. detailed language on the exceptional circumstances in which otherwise ‘fixed and
unchanging’ base periods can be updated for decoupled income support,
investment aids and regional assistance programmes (paragraphs 6, 11 and 13),
plus explicit provisions for Members wishing to establish new programmes under
these categories;
4. a longer time period used to assess maximum allowable levels of compensation
for disaster relief (paragraph 8), as well as additional flexibility for developing
countries, and specific new criteria covering crop insurance schemes and
compensation for crops or animals that are destroyed to control pests or disease;
5. for developing countries only, an exemption from the requirement in paragraph 13
that disadvantaged regions must form a contiguous geographical area in order to
qualify for assistance.
The countries or groups that originally proposed the changes that the chair has included
can be quite easily identified. The possible new subparagraph 2(h) draws essentially on
language put forward by the G-20 and the African Group, while the modifications to the
text on domestic food aid and public stockholding for food security incorporate proposals
made by the G-20. The G-20 had also called for developing countries to be exempt from
the requirement in paragraph 13, a change subsequently supported by the African Group
and the US.
The G-20, Cairns Group and Canada had proposed that base periods be “fixed and
unchanging”, while other Members such as the EU and Switzerland reportedly made
informal proposals clarifying when exceptional updates could be made. The new
language on disaster relief incorporates changes proposed mainly by the US and Canada,
with some flexibilities proposed by the African Group.
Evolution of the negotiations
Although a number of proposals had already been made in the run-up to the 1999 Seattle
Ministerial conference7, negotiations began in earnest in 2000 under the mandate of
article 20 of the Agreement on Agriculture. A large number of formal proposals were
tabled that year8 on the green box, with many more in 20019 and 200210. While for the
most part countries staked out their initial positions in the first two years, the launch of
the Doha Round in November 2001 led to a number of more detailed drafting proposals
being made the following year.
The circulation of draft texts by the chair of the agriculture talks, Stuart Harbinson, was a
significant first attempt to define possible common ground between Members, ahead of
the initial March 2003 deadline for agreement on modalities. Later that year, the
emergence of the G-20 in response to a joint EU-US proposal can be seen as a ‘tectonic
shift’ in the negotiations that irrevocably changed the geopolitical landscape of the round.
Green box issues seem not to have been examined again in much detail until 2005:
mandates in the 2004 July Framework and the Hong Kong Declaration guided subsequent
discussions, which picked up again in 2006 with further submissions from key players.
Most recently, the various iterations of Crawford Falconer’s draft modalities text have
narrowed the focus of the negotiations to a handful of issues, of which the question of
base period updates has dominated. While a limited number of G-20 and Cairns Group
proposals to tighten green box criteria were still included in the 2006 draft, subsequent
revisions dropped these for the most part. Figure 1 below summarises the evolution of the
negotiations.
US; EU
2005
G-20 (JOB(06)/145)
African Group (TN/AG/GEN/15); US (JOB(06)/80)
G-10 (JOB(06)/12)
2006
2007
2008
Figure 1: Timeline of green box negotiations
AU-ACP-LDC (WT/MIN(03)/W/17);
Jamaica (WT/MIN(03)/W/11);
G-20 (JOB(03)/162 + Rev.1, WT/MIN(03)/W/6+Add.1 and 2)
Kenya (JOB(03)/175); Norway (JOB(03)/169);
Bulgaria, Chinese Taipei, Iceland, Korea, Liechtenstein and
Switzerland (JOB(03)/167);
Japan (JOB(03)/165); African Group (TN/AG/GEN/8);
EU-US (JOB(03)/157)
2003
2004
G-20
Canada
Aug
July
May
Feb
Chair’s report to TNC (JOB(08)/95)
Modalities draft (TN/AG/W/4/Rev3)
Modalities draft (TN/AG/W/4/Rev2)
Modalities draft (TN/AG/W/4/Rev1)
Aug Modalities draft (TN/AG/W/4)
May Challenges paper 2
June Modalities draft (TN/AG/W/3)
May Reference paper rev1
Apr Reference paper
Jan
Hong Kong Declaration
Dec
(WT/MIN(05)/DEC)
Oct
Aug Groser status rpt (TN/AG/19)
June
May
Aug July Framework (WT/L/579)
Sept
Derbez draft text
(JOB(03)/150/Rev.2)
Aug
Perez del Castillo / Supachai draft
(JOB(03)/150/Rev.1)
Harbinson text rev1
(TN/AG/W/1/Rev.1)
Feb Harbinson text (TN/AG/W/1)
Dec Chair’s Overview (TN/AG/6)
Mar
African Group (JOB(02)/187);
Developing country ‘like minded group’ (G/AG/NG/W/14);
Kyrgyz Republic (JOB(02)/179);
Norway (JOB(02)/165); Japan (JOB(02)/164)
Canada (JOB(02)/131); Cairns (JOB(02)/132)
China (JOB(02)/104); Philippines (JOB(02)/111);
Korea (JOB(02)/125); Chinese Taipei (JOB(02)/126);
Canada (JOB(02)/127)
2002
Switzerland (JOB(03)/37); EU (JOB(03)/12)
Nov
Oct
Sept
Cairns Group (G/AG/NG/W/35)
Developing country ‘like minded group’ (G/AG/NG/W/14)
Doha Declaration
(WT/MIN(01)/DEC/1)
Mar
Feb
Jan
Dec
2000
Namibia (G/AG/NG/W/143);
African Group (G/AG/NG/W/142);
Jordan (G/AG/NG/W/140); Mexico (G/AG/NG/W/138);
Turkey (G/AG/NG/W/106); Morocco (G/AG/NG/W/105)
India (G/AG/NG/W/102);
Korea (G/AG/NG/W/98); Norway (G/AG/NG/W/101)
Canada (G/AG/NG/W/92); Japan (G/AG/NG/W/91);
Switzerland (G/AG/NG/W/94); EU (G/AG/NG/W/90)
ASEAN (G/AG/NG/W/55);
Transition countries (G/AG/NG/W/56)
2001
Nov
Nov
Oct
Sept
Jun
Secretariat summary of proposals
(G/AG/NG/S/18)
Countries stake out initial positions
Particularly significant was an early proposal11 by a cross-regional group of eleven
developing countries (sometimes referred to as the ‘like-minded group’). This
constructed a detailed argument for wholesale green box reform on development grounds,
and argued that many green box programmes do cause significant trade distortion. It
proposed establishing one ‘general subsidies’ box, with a permitted level of subsidies
defined in terms of countries’ volume of production; called for a ‘development box’ to
address developing countries’ rural employment and food security needs; and argued that
the due restraint ‘peace clause’ should apply only to developing countries.
In a similar vein, the Cairns Group also proposed12 that those green box measures not
subject to reduction and elimination be reviewed to ensure that they meet the
fundamental requirements of having no, or at most minimal, trade-distorting effects or
effect on production.
Another detailed proposal from India13 claimed that the green box was ill suited to
developing country needs. This argued that direct payments continued to distort trade for
a number of reasons, and proposed that payments under paragraphs 5, 6 and 7 of the
green box (direct payments, decoupled income support, and income insurance and
income safety-net programmes) be notified under the amber box and subject to reduction
commitments. The Africa Group also proposed14 that green box criteria be tightened to
ensure that they cause not more than minimal trade distortion.
In contrast, proposals from the EU15, Japan16, Switzerland17, Korea18 and Norway19
emphasised the need to expand the green box in order to ensure that ‘non-trade concerns’
were taken into account, although the EU concurred with the need to ‘revisit’ the green
box to ensure it caused no more than minimal trade distortion.
In November 2001, the Doha mandate then provided a fresh impetus to the talks, tying
them into a broader package of negotiations on other issues.
The first detailed drafting proposals
The first detailed drafting proposals were made in 2002. The Cairns Group20, building
heavily on a submission by Canada21, proposed tightening green box criteria: clarifying
that base periods were ‘fixed and unchanging’, allowing circumscribed additional
flexibility for disaster relief payments; and clarifying that certain programmes must be
unrelated to production volumes or inputs. The group also argued that direct payments
should be capped, and that Members should agree on reductions for direct payments in
paragraphs 5, 6, 7 and 11. More dramatically, seven members of the developing country
‘like-minded group’22 instead sought to eliminate these programmes for developed
countries, restricting their use to developing countries only; like the Cairns Group, they
also sought to time limit structural adjustment payments under paragraphs 9 and 10. The
African Group23, China24 and the Philippines25 also proposed classifying various direct
payments under the amber box.
In contrast, Norway26 called for no quantitative ceilings on the green box, and, along with
Japan27, proposed lifting restrictions on the compensation that countries are allowed to
provide under their income insurance and income safety net programmes. Korea28 sought
to incorporate two new paragraphs in the green box, allowing payments to producers of
staple crops for food security purposes and to small family farms in order to maintain
rural viability and cultural heritage, as well as allowing countries to define compensation
levels for income insurance and income safety net programmes, disaster relief and
environmental programmes (paragraphs 7, 8 and 12).
Submissions from the African Group29 and the ‘like-minded group’30 also aimed to make
the green box easier for developing countries to use. Both groups proposed, for example,
that developing countries be exempted from various regional assistance provisions under
paragraph 13. The African Group also proposed deleting a requirement for certain
developing country food stockholding purchases to be counted in the amber box, and
allowing developing countries to make disaster relief payments more easily. The likeminded group sought to exempt developing countries from reduction commitments for
products representing less than 3.25% of world trade, along with the internal transport
costs of staple foods, and also proposed allowing developing countries to determine the
production loss required for compensation under paragraphs 7 and 8. Chinese Taipei31
and the Kyrgyz Republic32 also called for greater flexibility for developing countries.
Harbinson’s draft modalities text
In December 2002, the chair of the agriculture negotiations, Stuart Harbinson, released an
‘overview’33 of the various submissions tabled to date, in preparation for the March 2003
deadline for agreement on modalities. He suggested that green box proposals could be
classed into those seeking to tighten existing criteria, enhance them, or clarify them. Key
outstanding issues, he said, included the following: whether a ceiling on some or all green
box spending should be established; whether the green box should be subject to reduction
commitments; whether it should be amended so as better to address developing country
needs; and whether changes should be made allowing it to cover various non-trade
concerns such as animal welfare.
The chair appended a running list of over 60 separate proposals on individual green box
criteria, covering the existing criteria, proposed new paragraphs, disciplines such as
spending limits or non-actionability, transparency and notification requirements, and
special and differential treatment for developing countries. This then became the basis for
the more limited set of proposals annexed to the draft modalities text known as the
‘Harbinson draft’, issued on 17 February 200334, and its subsequent revision, produced a
month later35. These texts organised the proposals into two parts, one covering those
addressing special and differential treatment for developing countries, and the other
covering other proposed changes. The draft also specified that green box provisions
“shall be maintained”, subject to these possible amendments.
Members continued to seek convergence on modalities after failing to reach agreement
by the end-March deadline. Harbinson’s July report to the TNC36 - intended to assist with
this process in advance of the Cancún ministerial conference in September - nonetheless
included as an annex the March revision of his modalities document with no further
changes.
The 2003 Cancún Ministerial Conference
A joint EU-US proposal37 that was released in mid-August galvanised a series of
significant events which have had a far-reaching impact on the dynamics of the round.
The proposal, which made no mention of the green box, scandalised developing countries
who felt that it failed to take into account their interests on a range of different issues. An
African Group response38 to the EU-US submission lamented that, amongst other things,
it “proposes a complex set of rules that appear to formalize the continued use of the
Green Box without new disciplines and a general cap”. Another counterproposal 39
from a group of countries that included a number of Cairns Group members, plus
China and India, eventually led to the formation of the influential G-20 developing
country coalition: this proposed that “green box direct payments (paragraphs 5 to 13
of Annex 2 of the AoA) shall be, as appropriate, capped and/or reduced for developed
countries. Additional disciplines shall be elaborated and agreed upon.” Finally, a
grand coalition composed of the African Union, the African, Caribbean and Pacific
(ACP) group of countries and the Least-Developed Countries (LDCs) called for the
“trade-distorting element of Green Box support measures” to be capped 40.
Subsidising countries remained equally firm in their desire to maintain the green box
essentially unchanged, with no cap or reduction commitments: Norway41 and Japan42
both took this position, as did a group of six countries that included Switzerland and
Korea43.
A draft text44 sent to Ministers before the Cancún meeting by the chair of the General
Council, Carlos Pérez del Castillo, and WTO Director-General Supachai Panitchpakdi
simply stated that “Green Box criteria remain under negotiation”, with no further detail.
The revised “Derbez text”45 that was circulated at the Ministerial, and which ultimately
failed to garner consensus, stated that “Green Box criteria shall be reviewed with a view
to ensuring that Green Box measures have no, or at most minimal, trade-distorting effects
or effects on production.” Polarisation of Members on agriculture amongst other things
ultimately led to the collapse of the meeting.
From Cancún to Hong Kong
In what appears to have been an indication of flexibility, the Cairns Group told a March
2004 negotiating meeting that the Doha mandate for ‘substantial reductions’ in all forms
of trade-distorting support “meant Amber Box, Blue Box and de minimis support… as
well as strengthened disciplines on the green box”46: seemingly, the group had decided to
relax their calls for cuts in green box support, in the interest of achieving reductions in
the other boxes. Other groups, such as the LDCs, nonetheless continued to press for
quantitative restrictions47.
The July 2004 Framework48 established a clear mandate for the ‘review and clarification’
of green box criteria, as described above: however, Members continued to remain divided
over whether the review should be simply a ‘health check’, as subsidising countries
argued, or, as reform-oriented countries such as those in the Cairns Group and G-20
preferred, a more substantive reappraisal of existing provisions.
In mid 2005 both Canada49 and the G-2050 circulated drafts suggesting amendments to
specific paragraphs, after a prolonged pause of more than two years since the previous
detailed drafting proposals. The G-20 submission also included a theoretical critique of
the alleged trade-distorting effects of green box direct payments, linking these to the
‘wealth effects’ identified in OECD analysis.
Both proposals shared some significant similarities, especially in the extent to which they
sought to discipline potential trade distortion, although the G-20 focused also on
expanding flexibilities for developing countries. Both, for example, called for base
periods to be ‘fixed and unchanging’, and were subsequently relatively important in
influencing the future direction of the debate on green box reform.
While Canada’s draft would have eliminated the possibility for new types of direct
payment under paragraph 5, thus retaining this paragraph only as a chapeau to paragraphs
6 to 13, the G-20 proposed that direct payments would have to conform to all the specific
requirements for decoupled income support in paragraph 6. Canada also reiterated earlier
Cairns Group demands for structural adjustment payments under paragraphs 9 and 10 to
be time limited; for the ‘structural disadvantages’ faced by producers receiving
investment aids to be clearly defined in paragraph 11; and for the reference to
compensation for ‘loss of income’ to be deleted from the eligibility requirements for
environmental payments under paragraph 12. Unlike the G-20, the Canadian proposal
would have provided additional flexibility to both developed and developing countries
for disaster relief payments (paragraph 8).
The G-20 proposed different ways in which existing criteria could be tightened. Again
building on earlier Cairns Group proposals related to specific types of direct payments,
the group proposed a new clause specifying that all such payments should not be linked
to production or inputs. In another development that could have implied significant
restructuring of the distributional structure of EU and US subsidies, the G-20 proposed
requiring decoupled income support payments to be based on “low levels” of income,
landholding and production. Two other potentially far-reaching proposals from the group
would have prevented governments from requiring factors of production such as land or
labour to be ‘in agricultural use’ in order to receive payments, and would have prohibited
them from making decoupled income support payments under paragraph 6 if, together
with amber box support, these jointly represented more than a given share of value of
production of a given product.
Other changes suggested by the G-20 would have provided additional flexibility for
developing countries. A number of these proposals successfully found reflection in later
drafts of the ‘modalities’ text: these included a new ‘general services’ paragraph covering
developing country programmes for food and livelihood security and rural development,
such as land reform, and increased scope for developing countries to cover various
domestic food aid and public food stockholding purchases in the green box. Other
influential proposals included provisions for developing countries that had not previously
made use of various kinds of direct payment programmes, and a clause exempting
developing countries from the requirement in paragraph 13 that disadvantaged regions
form a contiguous geographical area. The G-20 also suggested that developing countries
themselves be allowed to specify how much compensation should be provided under
paragraphs 7 or 8.
An August 2005 ‘status report’51 prepared by the chair of the agriculture negotiations,
New Zealand ambassador Tim Groser, described the “basis of a political deal” on the
green box: “existing heavy users of Green Box payments examine sympathetically some
proposals for clarifying the criteria that would not undermine their reforms” while at the
same time Members agree “to develop some new provisions that would meet the realities
of developing country agriculture” so long as these caused no more than minimal trade
distortion.
However, pre-Hong Kong submissions from the EU52 and the US53 suggested that heavy
subsidisers were not particularly willing to conclude any such deal. While the EU simply
reaffirmed its willingness to review and clarify the criteria, the US proposal bluntly stated
“no material changes in Green Box, specifically no expenditure caps”. A November 2005
report54 by the new agriculture negotiations chair, Crawford Falconer (also of New
Zealand) conceded that the review had led to no discernible convergence: on one side
was “a firm rejection of anything that is seen as departing from the existing disciplines”,
and on the other, “an enduring sense that more could be done to review the Green Box
without undermining ongoing reform”. Members were however open to making the green
box more ‘development friendly’, the chair reported. The final Ministerial Declaration55
from Hong Kong ultimately contained only the mandate referred to above, specifying that
the green box review must ensure that developing country programmes are effectively
covered.
By mid-2006, the process moved into a more informal stage. Table 2 below summarises
the main negotiating positions taken by Members, simplifying in some cases the more
nuanced arguments around the various issues.
Table 2: Members’ positions on some key issues in the green box negotiations
G20
Cairns
Group
Canada
US
EU
G-10
Yes
Dev’g
country
‘likeminded
group’
Yes
Yes
Yes
Yes
No
No
No
Yes
Yes
Yes
Yes
Yes
Allow
occasional
updates
Allow
occasional
updates
Allow
occasional
updates
Yes
No
No
No
Yes
Yes
No
No
No
Yes
Yes
Yes
Yes
No
No
No
No
Yes
Yes
African
Group
Cap /
reductions?
Ensure base
periods are
‘fixed and
unchanging’?
Preclude new
types of direct
pmts?
Time limit
structural
adjustment
payments?
Substantial
new
flexibility for
developing
countries?
New
flexibility for
disaster relief
payments?
Expand to
cover new
‘non-trade
concerns’?
Yes
Yes
Yes
Yes
No
No
Yes
Falconer’s modalities drafts: the text stabilises
Specific drafting proposals from both the African Group56 and the US57 in early 2006
concentrated primarily on defining the scope of additional flexibility for developing
countries. Both submissions proposed changes along these lines to the provisions relating
to general services and regional assistance, although the Africa Group also made
suggestions on public stockholding, disaster relief, investment aids and environmental
programmes. The US proposed changes to the provisions on income insurance and
income safety net programmes, and to those on disaster relief, that were broadly similar
to earlier Canadian proposals.
An April 2006 ‘reference paper’ from Falconer described the state of the debate at that
point in time, and identifies a number of key areas for further discussion. These include
the proposal that base periods be ‘fixed and unchanging’; a possible new ‘general
services’ sub-paragraph to address developing country programmes such as land reform;
additional flexibility for developing countries on public stockholding and domestic food
aid; and G-20 proposals to tighten requirements for direct payments and decoupled
income support payments. Subsidising countries in the G-10 and EU continued strongly
to oppose the latter, however. The chair noted “opposition” to the proposal to require
direct payments not to be linked to production or inputs; “a firm view” that direct
payments under paragraph 5 (including new payment types) should not be required to
conform to all the decoupled income support criteria in paragraph 6; and “firm
resistance” to all the G-20’s proposals on decoupled income support payments in
paragraph 6.
Falconer also noted that Members had not yet discussed in detail proposals for
paragraphs 7 to 13 and suggested that they need to decide whether or not to begin an
‘expert review’ of these. He recommended that Members instead focus in the first
instance on the other issues discussed in his paper.
The G-20 response58 to the reference paper reiterated their position on the trade-distorting
effect of green box payments when these are made in conjunction with amber and blue
box support. However, in a sign of flexibility, the group did also acknowledge that if
Members were to fulfil the mandate for substantial reductions of trade-distorting
domestic support, “with a combination of cuts, disciplines and monitoring, some of the
G-20 preoccupations would be partially met”. Falconer later issued a revised version of
his reference paper, reflecting discussion on green box criteria and the G-20 submission,
and incorporating a list of proposed changes for paragraphs 7 to 13.
In June 2006 the first Falconer modalities draft59 was issued, a text which contained
hundreds of square brackets, each indicating a lack of consensus on a proposed clause or
figure. On the green box, it included a detailed list of proposals on most paragraphs,
covering primarily those submitted in 2005 and 2006 by the G-20, African Group, US
and Canada (see Table 3 below). The text also included a few of the earlier Canadian
proposals that had been submitted in 2002, although other elements from the Harbinson
draft were not reflected. When Members were unable to agree on the draft, the Doha
negotiations were suspended, with no further talks until the following year.
Table 3: Origins of proposals on the green box reflected in Falconer’s June 2006 ‘Draft
Possible Modalities’ on Agriculture (JOB(06)/199), Annex H
Paragraph
General Services (paragraph 2)
Public Stockholding for food
security purposes (paragraph 3)
Domestic food aid (paragraph 4)
Direct payments to producers
(paragraph 5)
Decoupled income support
(paragraph 6)
Government financial
participation in income insurance
Origin of proposals
(i) G-20; US (minus the language in square brackets)
(ii) Language emerging from informal consultations
(iii) African Group
(i) African Group
(ii) G-20
(i) G-20
(i) G-20
(ii) Canada (May 2005 and March 2006)
(iii) Canada (September 2002)
(iv) US
(i) G-20
(ii) Canada (September 2002)
(i) G-20
(ii) Language emerging from informal consultations
and income safety-net
programmes (paragraph 7)
Payments (made either directly or
by way of government financial
participation in crop insurance
schemes) for relief from natural
disaster (paragraph 8)
Structural adjustment assistance
provided through investment
assistance (paragraph 11)
Payments under environmental
programmes (paragraph 12)
Payments under regional
assistance programmes
(paragraph 13)
(iii) Canada (March 2006)
(iv) Canada (May 2005)
(v) US
(i) G-20
(ii) Language emerging from informal consultations
(iii) African Group
(iv) Canada (March 2006)
(v) Language emerging from informal consultations
(vi) US
(i) G-20; African Group
(ii) Text without square brackets is from Canada May 2005. Text with
square brackets is from Canada March 2006.
(i) African Group
(ii) Canada (March 2006)
(i) G-20
(ii) African Group
(iii) US
(iv) Canada ((March 2006 and May 2005)
In April and May 2007, the chair issued two ‘challenges’ papers, the second of which
addressed the green box amongst other issues. Falconer indicated that the long list of
proposals that had been included in the 2006 modalities draft did not reflect the
convergence that had taken place in informal discussions. He proposed that Members
consider a limited sub-set of changes: a new subparagraph on general services, greater
flexibility for developing countries under the public stockholding and domestic food aid
paragraphs, new language on ‘fixed and unchanging’ base periods, and modifications
aimed at clarifying that ‘newcomers’ would be allowed to set up green box programmes
with new base periods. However, the chair wrote that “beyond that, I have the impression
that there is a strong reluctance to entertain much more by way of amendments to Annex
2. Of course a number of Members would prefer things otherwise, but I doubt that view
will prevail”.
Falconer nonetheless suggested that, as a consequence, Members would need to establish
“much more precise and effective provisions on transparency, monitoring and
surveillance” – one of the demands of the G-20 and Cairns Group.
A revised draft modalities text was issued in July 200760, including a far narrower set of
proposed changes. Proposals in the June 2006 draft that were not incorporated in the
2007 one include six major areas:
1. The G-20 and Canada’s proposed changes to direct payments in paragraph 5.
While the G-20 had proposed that these not be linked to production levels, and
that any new payment types conform to all paragraph 6 criteria, Canada had
simply deleted the possibility for new payment types.
2. The G-20’s proposed changes to decoupled income support payments under
paragraph 6: establishing a closed criteria list; specifying that eligibility for
payments must be based on “low levels of income, landholding and production
level”; precluding governments from requiring factors of production such as land
and labour to be in agricultural use; and prohibiting direct payments if, when
3.
4.
5.
6.
made jointly with amber box payments, these exceed a certain share of the value
of production for a given product.
Proposals on income insurance and income safety nets (paragraph 7): the G-20
had wanted developing countries to be able to determine permitted compensation
levels in national legislation, (as well as for disaster relief compensation under
paragraph 8); Canada had suggested that developing countries be allowed to base
income loss calculations on the agricultural sector as a whole rather than on an
individual basis; and Canada and the US had proposed using a longer reference
period to calculate compensation due to producers.
On investment aids (paragraph 11), Canada had proposed requiring that structural
disadvantages faced by producers be clearly defined, and prohibiting payments
from being based on factors of production.
Proposals on environmental payments (paragraph 12) were dropped: an African
Group proposal to exempt developing countries from the requirement in this area,
and a Canadian proposal to prevent payments from being based on the loss of
income incurred by producers.
In all paragraphs, references to notification were removed: the chair indicated that
these were to be addressed under a separate dedicated heading in the text.
Most of the more ambitious proposals for tightening existing green box criteria were
therefore dropped from the revisions that followed the 2006 draft. Members focused the
bulk of their attention on the issue of when exceptional updates to “fixed and
unchanging” base periods might be allowed, with detailed discussions on this issue taking
place during a series of informal technical discussions chaired by Falconer from
September 2007 onwards.
Falconer then issued further revisions of his modalities draft in February61, May62 and
July63 2008. A series of changes were made to the paragraphs on domestic food aid and
public stockholding, eventually coming full circle back to proposals made by the G-20.
Increasingly complex legal language on the exceptional updating of base periods left
some Cairns Group countries wondering whether these revisions had in reality moved in
the direction they had hoped to go. The green box was by this stage seen by most
Members as having largely ‘stabilised’, with large parts of the chair’s text remaining
essentially unchanged over a two-year period. Significantly, the green box review was
not one of the priority areas discussed at a mini-Ministerial meeting held in July, aimed at
reaching agreement on modalities for agriculture and industrial goods, nor was it
mentioned in an August 2008 report64 on the state of the negotiations by the chair. While
some trade analysts raised the possibility that some countries might still raise green box
concerns at a later stage - – such as those that were not party to the small-group
negotiations that had achieved convergence on the most controversial issues – most
assumed that no further major changes to the green box would be discussed.
Specific green box measures
The following section analyses the proposals made by Members, looking at each
paragraph in turn. While many proposals addressed green box reform more broadly,
several also included specific drafting proposals or recommendations about particular
paragraphs (see Table 4 below).
Table 4: proposals and texts covering specific green box measures
2008
July
May
Feb
2007
2006
2005
2003
2002
2000
Aug
May
June
May
May
Apr
Apr
Apr
June
May
Sept
Mar
Feb
Dec
Nov
Nov
Nov
Oct
Sept
Sept
Sept
Sept
Sept
Dec
Proposal / text
Falconer modalities
draft Rev3
Falconer modalities
draft Rev2
Falconer modalities
draft Rev1
Modalities draft W/4
Challenges paper 2
Falconer modalities
draft W/3
G-20
Reference paper rev1
Reference paper
US
African Group
G-20
Canada
G-20
Modalities rev1
Modalities draft
Overview
African Group
Developing country
‘like-minded group’
Norway
Cairns Group
Canada
Chinese Taipei
Korea
Philippines
China
Japan
2
x
3
x
4
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
5
Green box paragraph
6 7 8 9 10 11
x
x
x
12
13
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
Paragraph 2: General services
The ‘general services’ provision currently covers a range of different government
programmes, such as research, pest and disease control, training services, extension and
advisory services, inspection services, marketing and promotion services and
infrastructural services. Members have proposed adding a new clause (a new
subparagraph 2h) in order to cover a range of developing country policies and services,
such as land reform and other programmes related to livelihood security and rural
development.
The July 2008 revision of the Falconer modalities included a clause along these lines,
based heavily on the G-20’s June 2005 proposal and the African Group’s April 2006
submission. The G-20 had originally proposed covering agrarian, land and institutional
reform, as well as any other programme related to food and livelihood security and rural
development. Services related to such reform would also be included, as would
settlement programmes, issuance of property titles, employment assurance, provision of
infrastructure, nutritional security, poverty alleviation, soil conservation and resource
management, and drought management and flood control.
An April 2006 US proposal largely supported the G-20 language, although it would have
allowed developed countries to provide such programmes as well. It would also have
removed references to food and livelihood security and rural development, and the
provision of infrastructure.
Days before the US proposal was circulated, the African Group proposed language that
was similar to that put forward by the G-20, but with some minor differences. Although
the different proposals appeared side by side in the 2006 draft modalities text, along with
an alternative proposal made informally by Canada, the language was merged together in
the 2007 draft, and has since remained unchanged. As currently drafted, it would apply to
developing country programmes only.
Paragraph 3. Public stockholding for food security purposes
This provision covers the accumulation and holding of stocks as part of a food security
programme identified in national legislation.
The changes to the language on public stockholding for food security purposes would
mean that developing countries would no longer be required to account for purchases
from low-income or resource-poor farmers as part of the ‘aggregate measurement of
support’ (AMS). This would mean that these purchases would no longer count as part of
the total support levels which, in the negotiations, developing countries will have to
reduce. The G-2065 and Africa Group66 have submitted proposals on this, the former
explicitly stating that developing countries’ foodstuff acquisitions which have the
objective of supporting low-income or resource-poor producers should not have to be
accounted for in the AMS, and the latter simply eliminating the current requirement that
such purchases be accounted for in this way.
The chair’s April 2006 reference paper suggested that developing countries should not
have to notify this expenditure as AMS if they are still below their permitted de minimis
support limit of 10 per cent of the value of production in any given year67, although in the
May revision of this paper he acknowledged that the proponents sought more than simply
not being required to notify this support when it exceeds the de minimis level. The
August 2007 and February 2008 draft ‘modalities’ texts nonetheless incorporated
language along these lines, the former proposing that such support count as de minimis
and the latter disciplining the extent of support by linking it to the value of production.
Subsequent revisions, in May and July 2008, reverted to the original G-20 proposal,
exempting developing countries from the requirement to count this support in their AMS
when it is aimed at supporting low-income or resource poor producers.
Paragraph 4. Domestic food aid
This provision covers domestic food aid to sections of the population in need.
In 2005, the G-20 proposed that, if developing countries obtain foodstuffs at subsidised
prices from low-income or resource-poor farmers in order to fight hunger and rural
poverty, these purchases should be considered to be in conformity with the requirements
set out in paragraph 4, on domestic food aid, and in paragraph 3, on public stockholding.
In his second 2007 ‘challenges’ paper, the chair recorded some concern among Members
who fear that the proposed amendments could allow other kinds of support to be
included, although also suggests that this matter could be addressed if the amendment is
set out in the right terms. In his first reference paper, the chair also emphasises some of
the inherent contradictions in the language on domestic food aid in the current text.
The G-20’s proposal was included in the June 2006 draft modalities text, but dropped
from the August 2007 and February 2008 revisions: however, it was then reinstated in the
May and July 2008 versions.
Paragraph 5. Direct payments to producers
This provision underscores that direct payments must meet the fundamental requirement
for green box payments set out in paragraph 1, as well as meeting specific criteria for the
different individual types of direct payment set out in paragraphs 6 to 13 – decoupled
income support payments, income insurance and safety net programmes, natural disaster
relief payments, producer retirement programmes, resource retirement programmes,
investment aids, environmental programmes and regional assistance programmes.
The paragraph also specifies that ‘existing or new’ types of direct payment other than
those set out in paragraphs 6 to 13 must meet four of the five criteria for decoupled
income support payments (paragraph 6). The four requirements specify that the amount
of payments must not be related to the type or volume of production in any year after the
base period; nor must it be related to domestic or international prices after the base
period; nor must it be related to factors of production employed after the base period; nor
shall production be required in order to receive these payments. However, these ‘existing
or new’ types of direct payment do not explicitly have to conform to the requirement for
eligibility to be determined by “clearly-defined criteria such as income, status as a
producer or landowner, factor use or production level in a defined and fixed base period”.
Many Members have seen direct payments as one of the most problematic aspects of the
green box, with several early proposals calling for a cap on support in this category, or
reductions. In 2002, proposals were made by Canada68 for “an overall cap on domestic
support of all types, including amber support, Blue Box support and Green Box direct
payments to producers”; and by the Cairns Group69, for “a mechanism that will cap the
amount of expenditure allowed on direct payments in Annex 2 and reduce the
expenditure in paras 5, 6, 7 and 11”. A more far-reaching proposal was tabled by the
developing country ‘like-minded group’70, which proposed that measures provided under
paragraphs 5, 6, 7 and 11 be “eliminated”: only developing countries would be allowed to
have access to these as part of the special and differential treatment to be extended to
them. A year later, the G-2071 proposed that “Green box direct payments (paragraphs 5 to
13 of Annex 2 of the AoA) shall be, as appropriate, capped and/or reduced for developed
countries”.
More recently, in the face of opposition from subsidising countries to any cap or
reduction commitments, attention has focused on disciplines that would tighten the
existing criteria in the paragraph. Canada has proposed deleting the language requiring
‘existing or new’ types of direct payment to conform to all but one of the criteria in
paragraph 6; in a similar move, the G-20 has proposed explicitly requiring these types of
payment to conform to all paragraph 6 criteria.
The G-20 proposal from June 2005 also put forward specific language on the notification
of direct payments to producers, which would require Members to notify the base period
and all other relevant criteria, including laws, regulations and administrative decisions.
Further notifications would then include “regular and periodic information on how the
programmes under this provision achieve the stated objectives”. Notification has
subsequently been addressed under a separate part of the draft modalities text, as it has
been seen as a broader cross-cutting issue.
A G-20 proposal requiring direct payments not to be linked to production, including input
levels, has been more controversial. Although it was included in the 2006 draft modalities
text, it did not find reflection in subsequent versions.
Paragraph 6. Decoupled income support
This provision covers decoupled income support payments which conform to certain
criteria.
The criteria specify that the amount of payments must not be related to the type or
volume of production in any year after the base period; it must not be related to domestic
or international prices after the base period; it must not be related to factors of production
employed after the base period; and no production shall be required in order to receive
these payments. Furthermore, eligibility for these payments must be determined by
“clearly-defined criteria such as income, status as a producer or landowner, factor use or
production level in a defined and fixed base period”.
As for direct payments more generally, the criteria for decoupled income support
payments have been particularly controversial during the Doha Round. In the early stage
of the negotiations, a number of Members and negotiating coalitions called for these
payments to be capped, reduced or eliminated for developed countries: these included the
Philippines, Canada, the Cairns Group, the developing country ‘like-minded group’ and
the G-2072.
The Cairns Group73, building on an earlier Canadian proposal74, also originally proposed
that payments to individual producers should be available for no more than three years,
after which they ought not to be renewed.
The G-20 made a number of other proposals that would have tightened the eligibility
criteria for payments in this category. As indicated above, the G-20 proposed requiring
decoupled income support payments to be based on “low levels” of income, landholding
and production – a suggestion with potentially significant implications for the current
distributional structure of such payments in the EU and US, which tend
disproportionately to favour large producers and companies. The group also proposed
that governments must not require factors of production such as land or labour to be ‘in
agricultural use’ in order to receive payments – which they later clarified was intended to
mean “active commercial production”, and was not meant to preclude minimal usage in
order to avoid environmental degradation. The group also proposed that decoupled
support payments must not be made if, together with amber box support, they jointly
represent more than a given share of the value of production of a given product.
These proposals were met with firm opposition from subsidising countries in the EU and
G-10, and were not reflected in versions of the draft modalities text from 2007 onwards.
The green box proposal that has perhaps generated the most discussion in the Doha
Round was for the insertion of the word “unchanging” as a requirement for base periods.
The original text in the Agreement on Agriculture specified that base periods should be
“defined and fixed”: however, some Members were concerned that this could still allow
governments to encourage farmers to take certain production decisions in anticipation of
future updates and payments, by regularly updating the base periods which are used as
the reference point for payments to producers. This would then effectively re-establish a
link between payments and production.
The concern, which had initially been sparked by the updating of base periods for some
commodities in the 2002 US farm bill, led to proposals from Canada, the Cairns Group
and the G-20 to prevent similar updates from occurring again in the future75.
At the same time, the G-20 proposed that developing countries that had not previously
made use of decoupled income support payments should not be precluded from
establishing an appropriate base period. The chair later suggested that negotiators should
consider whether developed country ‘newcomers’ should also be covered by this clause.
Switzerland and the EU raised concerns that the inclusion of “unchanging” could
conceivably mean that they might never again be able to revise their base period figures,
even long in the future when the original programme may have become irrelevant. In
response to these objections, Canada proposed that new base periods could be allowed for
new subsidy programmes, if it could clearly be shown that these were substantially
different from their predecessors. This would allow governments to restructure their
subsidy programmes as needed.
The EU also suggested that it might not be appropriate to introduce this new language
under the paragraphs on investment aids and regional assistance (11 and 13), as had been
proposed by the Cairns Group and G-20. The EU warned that, if applied to these
paragraphs, the proposed new clause could affect their plans to decouple support from
production under the Common Agricultural Policy (CAP)76.
Successive revisions of the chair’s draft modalities text explored a variety of possible
compromises. The July 2008 text now includes over 500 words of relatively complex
legal text aimed at defining the “exceptional circumstances” in which updates can be
made to what are otherwise defined and fixed base periods. It also includes language
which would allow both developed and developing countries that have not previously
made use of these payments to do so, drawing on the language proposed by the G-20.
The proposed compromise includes a number of ingredients that had been proposed by
different Members and groups. It mentions the need to ensure that any update does not
affect producer expectations and production decisions, a key G-20 and Cairns Group
demand. It specifies that the updated base period must be a “significant” number of years
in the past; and also states the new base should be ‘determined and promulgated’ by the
administering authority in a way that producers could not reasonably have anticipated,
such that their production decisions could not have been “materially altered”. It requires
that any updating is not to be made in conjunction with a decision to increase the uniform
unitary rate per crop, “or otherwise amounts de facto to” a decision to do so. Finally, the
update must not have the effect of circumventing Members’ obligations under paragraph,
such as the requirement to cause not more than minimal trade distortion.
Paragraph 7. Income insurance and income safety-net programmes
This provision covers requirements for government financial participation in income
insurance and income safety-net programmes. Amongst other things, it sets out the
conditions for producers to be considered eligible for payments under these programmes,
and the maximum amount of compensation.
While some Members proposed that the eligibility criteria or maximum permitted
compensation under this provision were too strict, others sought to tighten the
requirements, or even count such support in the amber box. Japan77, Korea78, Chinese
Taipei79 and Norway80 all proposed making the existing requirements more flexible,
whilst China81, Canada82, the developing country like-minded group83, the Cairns
Group84 and the G-2085 focused primarily on making existing disciplines more restrictive,
or even capping or establishing reduction commitments for payments under this category.
Subsequent proposals from Canada and the G-20 dropped some of their earlier demands
on this paragraph.
The proposals made by Canada and the Cairns Group in 2002 would have specified that
governments could provide compensation for the loss of income derived from agriculture,
thereby excluding off-farm income from calculations. Canada, the US and the Cairns
Group both proposed extending the existing reference period for calculating
compensation from three to five years, on the basis that this would enable governments
better to take account of market conditions. The G-20 proposed providing additional
flexibility to developing countries, by allowing them to define eligibility criteria and
compensation in their own national laws.
However, despite the large number of proposals on this paragraph, and the fact that many
of these were reflected in the chair’s 2006 modalities text, no proposed changes were
included in any of his subsequent revisions of the draft.
Paragraph 8. Disaster relief
This provision covers disaster relief payments for natural disasters as well as other events
with similar implications, such as nuclear accidents or war. It includes both direct
payments and those made by way of government financial participation in crop insurance
schemes. It includes requirements on eligibility for such payments, and maximum
permitted compensation, along with other conditions.
The chair’s July 2008 draft modalities text reflects a proposal by Canada to establish two
new sub-paragraphs explicitly covering crop insurance and the destruction of animals or
crops to prevent pests and disease. Both the Cairns Group and the US later supported this
revised structure.
Canada had suggested that crop insurance payments be based on production loss in a
period that is “demonstrated to be actuarially appropriate”, rather than on the average
production loss in the previous three to five years. Trade delegates familiar with the
negotiations suggested that this would allow countries to reflect a longer term for the
calculation of losses which may be more appropriate than a fixed short period for certain
types of crop production.
The Canadian proposal also proposed allowing governments to compensate production
losses of less than 30 percent in the event of the destruction of animals or crops to
prevent pests, diseases or disease-carrying organisms. Negotiators indicated that this
could be important in allowing governments to compensate for outbreaks of diseases such
as mad cow disease, avian flu or foot and mouth disease, and maintaining incentives for
producers to report outbreaks of such diseases to the government while an outbreak is
still at an early stage.
Along with the US, Canada had also recommended extending from three to five years the
reference period for calculating compensation levels in the event of other kinds of
disasters. Again, this proposal was reflected in subsequent revisions of the chair’s draft
text.
A number of groups and individual countries proposed making the requirements for
developing countries more flexible86. The African Group in 2006 proposed that
developing countries be allowed to provide disaster relief for production losses of less
than 30% of the average in preceding years – the benchmark that would otherwise apply
to developed countries. The G-20 and also the developing country like-minded group had
similarly proposed allowing developing countries to define eligibility criteria for
compensation in their own national legislation. The African Group proposal ultimately
found reflection in the chair’s draft modalities text, as did a proposal to allow developing
country Members to determine the production loss of the affected sector or region on an
aggregate basis.
Paragraphs 9 and 10. Producer and resource retirement programmes
These provisions cover structural adjustment assistance provided through producer and
resource retirement programmes. They set out eligibility requirements, and, in the case of
producer retirement, stipulates that payments must be conditional on the “total and
permanent retirement of the recipients from marketable agricultural production”.
None of the Falconer draft modalities texts, from 2006 onwards, have included any
specific proposals on either of these two provisions. However, a May 2005 submission
from Canada would have included a requirement in both paragraphs to the effect that
“payments shall be time limited” - echoing earlier proposals from the Cairns Group and
the developing country ‘like-minded group’. A subsequent Canadian submission, from
March 2006, nonetheless did not include this language.
Paragraph 11. Investment aids
This provision covers structural adjustment assistance provided through investment aids.
It includes eligibility requirements relating to the existence of ‘objectively demonstrated
structural disadvantages’, prohibitions on relating such payments to the type or volume of
production after the base period (as well as to prices relating to this production), and
other requirements and conditions.
Negotiations on this paragraph have essentially mirrored those on the possibility of
exceptional updates of base periods for decoupled income support payments under
paragraph 6. The discussions in this area have therefore moved in parallel, along with
those on paragraph 13, and are summarised above.
Canada and the Cairns Group have also proposed language stipulating that “such
structural disadvantages must be clearly defined”, and that payments must not be related
to, or based on, factors of production in any year after the base period87. After 2006,
however, these proposals have not found reflection in the chair’s revised draft modalities
texts.
Paragraph 12. Environmental programmes
This provision covers payments under environmental programmes, and includes
eligibility requirements and limitations on the amount of payment that may be provided.
Specific proposals on the Green box criteria for environmental programmes were made
by the African Group88, Canada89 and the Cairns Group90. The African Group proposal
would effectively have exempted developing countries from the criteria for payments
under environmental programmes, whereas the Canadian proposal would have eliminated
the reference to compensation for the “loss of income” incurred in complying with a
government programme, restricting compensation to “the extra costs” of compliance
only. Canada proposed adding a requirement that payments under environmental
programmes not be “related to or based on the volume of production”:
In May 2005, Canada had also proposed deleting a requirement for payments to be
dependent on the fulfilment of conditions in government programmes related to
production methods or inputs.
As with paragraphs 9 and 10, after 2006 none of these proposals were reflected in
subsequent revisions of the chair’s draft modalities text.
Paragraph 13. Regional assistance programmes
This provision covers payments under regional assistance programmes, and includes
eligibility requirements, prohibitions on linking payments to the type or volume of
production after the base period, or to the prices of this production, and other
requirements and conditions.
Various individual countries and groups have made proposals for developing countries to
be granted additional flexibility in defining what constitutes a disadvantaged region under
this paragraph. An early China proposal suggested that a clear definition be established,
taking the average poverty level of developing country Members as the criteria91. The
developing country like-minded group proposed that be allowed to target assistance to
“predominantly low income and resource poor producers in the concerned region”92, and
another early Africa Group proposal suggested that criteria various other criteria in the
paragraph should not apply to developing country Members93.
More recently, in 2005, the G-20 proposed that developing countries be exempted from
the condition “that disadvantaged regions must constitute a clearly designated contiguous
geographical area with a definable economic and administrative identity” - language
echoed the following year in proposals from the African Group and the US94. The chair’s
draft modalities text eventually reflected language very similar to this, although
excluding the clause relating to the region’s economic and administrative identity.
As noted above, the discussion around base period updating under this paragraph
essentially mirrored that concerning paragraphs 6 and 11, and as described in the section
on decoupled income support payments.
Conclusion
The debate on green box criteria at the WTO has evolved considerably over the course of
a few years, narrowing down to a handful of measures that Members feel are politically
feasible. Ambitious proposals to either expand or constrain domestic support under this
category have been put aside, as negotiators focus on those issues that they believe are
capable of commanding consensus in the context of a broader Doha Round deal.
However, there are reasons to believe that the negotiating history in this area may still
provide a valuable guide to the future. Some of the issues that negotiators raised early on
in the round may still resurface, for example in future negotiations on agricultural trade
reform, insofar as they reflect deep-seated underlying concerns about the nature of
support in this category.
To a great extent, the discussions around green box criteria have to be seen in the broader
context of the negotiations on levels of overall trade-distorting support (OTDS), and
indeed also of agricultural market access, and the other issues that Members seek to
address in the Doha Round. If Members are indeed successful in achieving their goals in
these other areas, they may choose to focus future attention on the criteria for green box
support, and their effectiveness both in disciplining trade distorting effects and in
achieving broader public policy goals.
1
I.e. those covered by Annex 2 of the Agreement on Agriculture. These are exempt from reduction
commitments on the basis that they have no, or at most minimal, trade-distorting effects or effects on
production.
2
TN/AG/6
3
Agreement on Agriculture, Annex 2, paragraph 1: “Domestic support measures for which exemption from
the reduction commitments is claimed shall meet the fundamental requirement that they have no, or at most
minimal, trade-distorting effects or effects on production.”
4
WT/MIN(05)/DEC, paragraph 5
5 Article 20, Continuation of the Reform Process: “Recognizing that the long-term objective of substantial
progressive reductions in support and protection resulting in fundamental reform is an ongoing process,
Members agree that negotiations for continuing the process will be initiated one year before the end of the
implementation period, taking into account:
(a) the experience to that date from implementing the reduction commitments;
(b) the effects of the reduction commitments on world trade in agriculture;
(c) non-trade concerns, special and differential treatment to developing country Members, and the objective
to establish a fair and market-oriented agricultural trading system, and the other objectives and concerns
mentioned in the preamble to this Agreement; and
(d) what further commitments are necessary to achieve the above mentioned long-term objectives.”
6
G/AG/NG/S/18
7
See G/AG/NG/S/18 for a summary of these
8
These included proposals by: a group composed of Cuba, the Dominican Republic, Honduras, Pakistan,
Haiti, Nicaragua, Kenya, Uganda, Zimbabwe, Sri Lanka and El Salvador (G/AG/NG/W/14); the Cairns
Group (G/AG/NG/W/35); ASEAN (G/AG/NG/W/55); a ‘transition economies’ group composed of
Albania, Bulgaria, Croatia, the Czech Republic, Georgia, Hungary, the Kyrgyz Republic, Latvia, Lithuania,
Mongolia, Slovak Republic and Slovenia (G/AG/NG/W/56); the EU (G/AG/NG/W/90); Switzerland
(G/AG/NG/W/94); Canada (G/AG/NG/W/92); and Japan (G/AG/NG/W/91). While some of these include
detailed proposals on the green box, others mention Members’ positions as part of a broader submission on
domestic support or agricultural reform more generally.
9
These included proposals by Korea (G/AG/NG/W/98); India (G/AG/NG/W/102); Norway
(G/AG/NG/W/101); Turkey (G/AG/NG/W/106); Morocco (G/AG/NG/W/105); Mexico
(G/AG/NG/W/138); Jordan (G/AG/NG/W/140); Namibia (G/AG/NG/W/143); and the African Group
(G/AG/NG/W/142).
10
These included proposals by China (JOB(02)/104); the Philippines (JOB(02)/111); Korea (JOB(02)/125);
Chinese Taipei (JOB(02)/126); Canada (JOB(02)/127); the Cairns Group (JOB(02)/132); Norway
(JOB(02)/165); the Kyrgyz Republic (JOB(02)/179); Japan (JOB(02)/164); 7 members of the crossregional developing country ‘like-minded group’ (JOB(02)/174); and the African Group (JOB(02)/187).
11
G/AG/NG/W/14
12
G/AG/NG/W/35
13
G/AG/NG/W/102
14
G/AG/NG/W/142
15
G/AG/NG/W/90
16
G/AG/NG/W/91
17
G/AG/NG/W/94
18
G/AG/NG/W/98
19
G/AG/NG/W/101
20
JOB(02)/132
21
JOB(02)/127
22
JOB(02)/174
23
JOB(02)/187
24
JOB(02)/104
25
JOB(02)/111
26
JOB(02)/165
27
JOB(02)/164
28
JOB(02)/125
29
JOB(02)/187
30
JOB(02)/174
31
JOB(02)/126
32
JOB(02)/126
33
TN/AG/6
34
TN/AG/W/1
35
TN/AG/W/1/Rev.1
36
TN/AG/10
37
JOB(03)/157
38
TN/AG/GEN/8
39
JOB(03)/162, later reissued with more cosponsors as JOB(03)/162/Rev.1; and then as WT/MIN(03)/W/6,
WT/MIN(03)/W/6/Add.1 and WT/MIN(03)/W/6/Add.2.
40
WT/MIN(03)/W/17
41
JOB(03)/169
42
JOB(03)/165
43
JOB(03)/167
44
JOB(03)/150/Rev.1
45
JOB(03)/150/Rev.2
46
TN/AG/R/11
47
TN/AG/R/14
48
WT/L/579, paragraph 16
Informal ‘non-paper’, May 2005
Informal ‘non-paper’ annexed to the document “Two Years of Activity of the G-20: Moving Forward the
Doha Round”, available online at: http://www.g-20.mre.gov.br/conteudo/19082005_Breviario.pdf
51
TN/AG/19
52
“Making Hong Kong a Success: Europe’s Contribution” - Brussels, 28 October 2005
53
U.S. Proposal for WTO Agriculture Negotiations, 10 October 2005
54
TN/AG/21
55
WT/MIN(05)/DEC
56
TN/AG/GEN/15
57
JOB(06)/80
58
JOB(06)/145
59
JOB(06)/199, later reissued as TN/AG/W/3
60
JOB(07)/128, later reissued with corrections as TN/AG/W/4
61
TN/AG/W/4/Rev.1
62
TN/AG/W/4/Rev.2
63
TN/AG/W/4/Rev.3
64
JOB(08)/95
65
Informal ‘non-paper’ annexed to the document “Two Years of Activity of the G-20: Moving Forward the
Doha Round”, available online at: http://www.g-20.mre.gov.br/conteudo/19082005_Breviario.pdf
66
TN/AG/GEN/15; and also an earlier 2002 proposal, JOB(02)/187
67
Article 6.4 of the Agreement on Agriculture
68
JOB(02)/131
69
JOB(02)/132
70
JOB(02)/174
71
WT/MIN(03)/W/6
72
JOB(02)/111, JOB(02)/131, JOB(02)/132, G/AG/NG/W/14 and WT/MIN(03)/W/6
73
JOB(02)/132
74
JOB(02)/127
75
JOB(02)/127, JOB(02)/132 and the 2005 G-20 and Canadian proposals. Other Members and groups also
proposed similar language for other paragraphs.
76
See “Ag negotiators haggle over base periods for green box payments”, Bridges Weekly Trade News
Digest, Volume 11, Number 36, 24 October 2007. http://ictsd.net/i/news/bridgesweekly/7849/
77
G/AG/NG/W/91
78
JOB(02)/125
79
JOB(02)/126
80
JOB(02)/165
81
JOB(02)/104
82
JOB(02)/127, see also 2005 proposal
83
JOB(02)/174
84
JOB(02)/132
85
WT/MIN(03)/W/6, see also 2005 proposal
86
Such as TN/AG/GEN/15, G/AG/NG/W/14, the 2005 G-20 proposal and JOB(02)/187
87
JOB(02)/132, JOB(02)/127 and Canada’s 2005 proposal.
88
TN/AG/GEN/15
89
Canada’s 2005 proposal; see also JOB(02)/127
90
JOB(02)/132
91
JOB(02)/104
92
G/AG/NG/W/14
93
JOB(02)/187
94
JOB(06)/80 and TN/AG/GEN/15
49
50