Looking beyond the Doha negotiations: A possible reform of the WTO agricultural subsidies rules

The World Trade Organization (WTO) has treated agricultural subsidies as exceptional. This paper delves into the historical origin of the agricultural subsidies rules of the GATT/WTO. During the era of the GATT 1947, agricultural subsidies were subject to rules for general subsidies with a few exceptions. Under the Uruguay Round Agreement (UR Agreement), subsidies in general were regulated under the Agreement on Subsidies and Countervailing Measures (SCM Agreement), while agricultural subsidies were separately regulated under the Agreement on Agriculture (AA). Institutionalization of the dual track approach under the UR Agreement enabled various policy measures to be developed inconsistently within the twofold regulatory framework. The special status of agricultural products stands out even more in the Peace Clause (Article 13 of the AA), yet its detailed relationship to the SCM Agreement is unanswered in the WTO dispute settlement mechanism. This paper suggests that convergence of the SCM Agreement and the Agreement on Agriculture is eventually required for resolving the structural inconsistency in the GATT/WTO subsidies regime.