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European Union (EU) agri-environmental programmes (AEPs) represent a significant step in the region's efforts to decouple agricultural output from production and export subsidies. While AEPs comprise only a small share of EU agricultural support, they have two possible external impacts: 1) the composition of the EU's imports and exports may change as their producers become more market responsive; and 2) the WTO's Green Box (subsides considered minimally trade distorting and hence not disciplined) may become increasingly contentious. Our concern is with the drivers of AEPs in the EU and their implications for Canada.


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