The Doha Development Round of trade negotiations in the WTO aims to achieve substantial reductions in trade-distorting domestic support. The Harbinson draft modalities were tabled in March 2003, followed by less detailed draft framework texts for modalities before and during the Cancún meeting in September 2003. The framework texts introduce new provisions not present in the Harbinson modalities or in earlier proposals, modify some provisions and eliminate others. The Harbinson modalities and the five 2003 framework texts (EC-US, del Castillo, G-21, Derbez, and G-21) show differences and similarities and show how certain provisions evolved over time in, e.g., the green box, the blue and revised blue box, deminimis, AMS and Total AMS commitments, and the sum of overall support. To assess the various provisions consistent assumptions are adopted for the numerical values of reductions and other parameters, which remain subject to negotiations. The resulting entitlements to provide support, after full implementation, are assessed for USA, the EU, Japan, Canada and Brazil. This shows the significance of tiered reduction commitments of Total AMS, as opposed to equal reductions for all. It also shows the significance of the size of any caps on the amounts exempted as de minimis or as blue box payments. This is particularly the case if the set of policies qualifying as exempt is made larger and perhaps more distorting by removing the production-limiting condition on blue box payments. Capping product-specific AMS amounts based on past amounts would lock in existing differences between those who provide high support to many individual products and those who provide low support to individual products. The "maximum distorting support" (MDS) is calculated for the five Members under the provisions of each of the six texts. The EC-US draft framework would allow about the same MDS as the Harbinson modalities, while the del Castillo and Derbez frameworks would result in a twenty percent reduction from Harbinson. The G-20 framework (of September 9) would allow an MDS half as large as under Harbinson, and the G-21 framework (September 14) would yield an MDS equal to two-thirds of Harbinson's. Overall the provisions of the draft texts are found to be dauntingly complex, with several constraints operating at the same time. The largest possible reduction of Total AMS, combined with better rules on exemptions, could be effective in achieving the substantial reduction of trade-distorting support. The overall reduction of all non-green support without exemptions could also, if the reduction is large enough, effectively achieve that substantial reduction articulated in the Doha objective on domestic support.

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Working Paper 04-2

 Record created 2017-04-01, last modified 2020-10-28

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