WTO and Policy Space to Support Farmers’ Income: Implications of EU-Brazil Proposal

Recently, some members of WTO, namely Brazil, European Union, Colombia, Peru and Uruguay, circulated a proposal (EU-Brazil proposal) on OTDS demanding a cap on trade distorting spending. This study examines the implications of EU-Brazil proposal regarding OTDS on the flexibility for developing and developed countries member to provide domestic support to agriculture. The study is focused on selected developing countries, namely India, China, Brazil and developed countries like USA, EU, Japan, Norway and Switzerland. The study has shown that EU-Brazil proposal leads to a steep cut in policy space for the developing countries. It will further curtail the limited and already insufficient policy space for implementing agricultural policies which are compatible with the socio-economic situation prevailing in the developing country members. On the other hand, USA and EU will undertake negligible or no reduction in trade distorting support to agriculture sector and these countries will enjoy their existing flexibility in future as well. On the other hand, Japan, Norway and Switzerland will face steep cut in their existing policy space. Contrary to Doha Declaration, this proposal seeks to provide special and differential treatment to EU and USA.