Farm Subsidies Face Litigation Threat Under WTO Rules, Oxfam Warns

Strategic Insights -

Critics of rich country farm subsidies are mobilizing against what they see as distortions in global trade, following successful cases brought against the US and the European Union. A report co-authored by Oxfam and a trade law firm found that $13 billion worth of subsidies in the EU and US could be challenged under WTO rules. These include support for wine, fruit, vegetables, and tobacco, as well as corn and rice in the US.

Key Takeaways:

  • Oxfam's analysis, co-written with a trade law firm, identified $13 billion worth of subsidies that could be legally challenged at the World Trade Organisation, including EU support for wine, fruit, vegetables, and tobacco, as well as US support for corn and rice.
  • The report highlighted that successful cases brought by Brazil against US cotton subsidies and the European Union sugar regime have forced reform and created precedents that could be exploited across a range of farm products.
  • Phil Bloomer, head of Oxfam's trade campaign, stated that failure to reform subsidies in the Doha round of trade talks would increase the chances of litigation, potentially targeting EU subsidies that require agricultural processors to use farm produce grown in Europe and others arguing that subsidies depress the world price and hurt farmers elsewhere.
  • A spokesman for EU trade commissioner Peter Mandelson said that wine, fruit, and vegetables would be reformed next year, along with tobacco subsidies, while US secretary of agriculture Mike Johanns mentioned possible cases over rice and corn subsidies, highlighting the potential for future litigation.

Statistics:

  • $13 billion worth of subsidies could be legally challenged at the World Trade Organisation, including EU support for wine, fruit, vegetables, and tobacco, as well as US support for corn and rice.
  • 23 WTO member countries have voiced concerns over EU and US farm subsidies.
  • 64% increase in the number of challenges brought by developing countries since 2003 has forced reform and created precedents that could be exploited across a range of farm products.

Sources:

  • Oxfam report, authors withheld, "The Doha round: farmers' success on trade can end hunger, but only if rich world farm subsidies are reformed", cited.
  • World Trade Organisation (WTO) rules governing the judicial panel that rules on cases brought by member governments.
  • Oxfam's trade campaign, according to Phil Bloomer.
  • EU Commissioner Mandelson's spokesman.
  • US secretary of agriculture Mike Johanns.
  • NICOLAS LOCKHART, Sidley Austin Brown & Wood in Geneva, quoted.