EU and Brazil join forces for global level-playing field in farm subsidies

The EU and Brazil – two of the world’s biggest producers of agricultural products – today submitted to the World Trade Organisation (WTO) a joint proposal on support for agricultural production and food security measures. The objective is to limit market distortions, to ensure a global level-playing field for farmers while taking into account particular needs of developing countries.

Colombia, Peru and Uruguay have already expressed their support for the initiative and are co-sponsors of the EU-Brazil proposal.

Agricultural domestic support is an important issue in the negotiations leading up to the 11^th WTO Ministerial Conference (MC11) to be held in Buenos Aires in December 2017.

Commissioner for Trade Cecilia Malmström said: “Together with Brazil and other countries we are demonstrating our staunch support for a global trading system based on rules, at an important time for the World Trade Organisation. Our proposal is at once ambitious and realistic. It will ensure that we can have forward-looking and hopefully successful negotiations on this important issue in Buenos Aires.”

Phil Hogan, Commissioner in charge of Agriculture and Rural Development said: “I am delighted that the EU and Brazil can continue their leadership role from the 2015 Nairobi Ministerial Conference, where our joint proposal led to the historic reform of global export competition rules in agriculture. Now we turn our attention to domestic agricultural subsidies. The EU has substantially reformed its agricultural policy. This proposal should lead other WTO Members to follow our example and so ensure a level playing field for all farmers in the local, regional and global markets.”

The proposal suggests to level the playing field between WTO members by limiting trade-distorting farm subsidies in proportion to the size of each country’s agricultural sector. The initiative takes into account the specific needs of developing countries: the least developed countries would be exempted from any subsidy limits, in order to allow for development of their farming sector. Other developing countries could also support their farmers in a more generous way and take more time to adapt. Given the importance of cotton to many developing countries, the proposal also tackles trade-distorting subsidies for that sector in a targeted, timely and ambitious manner.

As concerns public stockholding schemes run for food-security purposes, the proposal implements the mandate from the 2013 Ministerial Conference to reconcile existing public practices with WTO subsidy rules. Rules on such stockholding schemes would be reinforced and accompanied by measures to avoid negative, distorting market effects.

Other issues, where the EU is also pushing for new solutions to be discussed at the December WTO Ministerial, are fisheries subsidies, e-commerce, domestic regulation in services, transparency for smaller companies and investment facilitation.

Further information

WTO report welcomes the EU’s engagement in the WTO and its strong call to resist protectionism

The Doha Development Agenda

10th World Trade Organization Ministerial Conference in Nairobi – 15-18 December 2015

EU leads efforts to tackle agricultural export competition at 10th WTO Ministerial Conference