Special and Differential Treatment in the WTO Agricultural Negotiations



by developing countries of Green Box, de minimis and Article 6.2 subsidies would not be
actionable under the WTO Subsidies Agreement.

De minimis thresholds apply separately to product-specific support (which is directed to
individual commodities, such as an administrative support price for wheat) and non-product-
specific support (which is available to all commodities such as general input subsidies). Some
countries, such as India, tend to
tax farmers through product-specific support (by paying
below world market prices) but compensate them through generous levels of non-product-
specific support. A specific demand is that developing countries should be allowed to credit
any negative product-specific support against the non-product-specific
de minimis support. It
can be argued, with some justification, that the combination of taxing producer prices and
compensating for this through subsidies on inputs is not an efficient agricultural policy and
thus should not be encouraged through WTO exemptions. The counter-argument is that the
WTO should refrain from dictating the domestic policy choices of Members where the impact
of their agricultural policies on international markets is minimal as it would be in this instance
where the trade effects of the two policies offset each other. On this argument, the measure
should be included in a new Agreement.

Differentiation

If the purpose of the Development Box is to promote food security initiatives in food-insecure
countries, then such countries need to be appropriately identified. The WTO has established a
list of net food-importing developing countries and least developed countries for the purposes
of the Marrakesh Decision. This list currently comprises all least developed countries as
defined by the United Nations as well as 19 other developing country members. However,
there is widespread agreement that this list does not adequately capture all those countries
which could be viewed as food-insecure (Stevens, 2002; Diaz-Bonilla et al., 2000).

Diaz-Bonilla et al. (2000) examine indicators for 167 countries to identify groups of countries
which can be categorised as food-insecure according to five measures of food security: food
production per capita, the ratio of total exports to food imports, calories per capita, protein per
capita, and the share of the non-agricultural population. Their study identifies 12 clusters of
countries according to similarities in their food security profiles. They define those four
clusters with the lowest scores as ‘food insecure’. While the net food-importing category is
poorly correlated with indicators of food insecurity, the least developed countries do
correspond broadly with those countries deemed to be suffering from food insecurity under
this measure.

On the other hand, as they point out, limiting eligibility for the Development Box just to the
least developed countries would be a substantial retreat from the principle of special and
differential treatment. It is a reasonable assumption that there are some non-least developed
countries which are food insecure - but how are these countries to be defined in a way which
commands agreement?
9

Ruffer et al. (2002) have also examined the classification of countries on the basis of five
plausible criteria in order to define a food insecure country. They found that only seven
countries (of which only 4 were WTO members on 1 January 2002) met all their criteria for
food insecure countries where data existed! Their findings indicate that the classification
question is not an innocent technical matter but is likely to prove to be highly controversial.
Furthermore, the current category of net food importing developing countries, which was a

9 See Stevens (2002) for an attempt to define a list of countries that combine low real GDP per capita,
high vulnerability and dependence on imported food. Diaz-Bonilla et al. (2000) also produce a list
based on their methodology. The Ruffer et al. (2002) comparison shows countries that would qualify as
food-insecure under alternative classification criteria, but the authors do not propose their own list.

17



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