7 - Disputes Involving Agricultural Domestic Support

Summary

Settled disputes involving agricultural domestic support, often in conjunction with export subsidies, are reviewed in this chapter, including economic circumstances, main arguments and findings, and policy responses. Differences and overlap between obligations and arguments under the Agriculture and SCM Agreements are articulated. Contrast is drawn between adjudicated MPS measurement for China wheat and rice and India sugarcane (under appeal). A modified measurement of MPS is proposed using market-based lagged reference prices. US cotton support found to cause significant price suppression and the eventual policy continuity at the end of this long dispute are examined. Cross-subsidization of exports resulting from domestic support measures for Canada dairy and EU sugar, and consequent reform particularly of the sugar regime are assessed. Each dispute arose in relatively egregious market interventions circumstances, clarified interpretation of the WTO rules, and has demonstrated limits on some types of domestic support.