WTO Constraints on U.S. and EU Domestic Support in Agriculture: The October 2005 Proposals

The USA, the EU and the G-20 submitted proposals on domestic support in the WTO agriculture negotiations in October 2005. This research projects future support, allowances and constraints for the USA and the EU under these proposals. Accounting properly for the de minimis rules generates a "maximum usable components" constraint, which, even when added to the cap on blue, can be more constraining than the new overall commitment. The overall commitment under the U.S. proposal constrains neither the USA nor the EU in the future. However, the overall commitment under the EU and G 20 proposals constrains both the USA and the EU to provide less future overall support than the sum of the cap on blue and maximum usable components. In general the three proposals are weak in constraining future distorting support in the USA and the EU.