ABSTRACT
The Agreement on Agriculture (AoA), familiar from the Uruguay Round of the General Agreement on Tariffs and Trade (GATT) is being renegotiated in the context of the World Trade Organization (WTO). Reductions in support for agriculture will be tabled, which will affect amounts spent on export subsidies. This paper focuses on the definition of export subsidies used in the Uruguay Round (WTO, 1994). It suggests that the language in the AoA omits an impor tant implicit subsidy in the form of price discrimination and revenue pooling (termed a ‘consumer only-financed’ export subsidy) and poorly defines ‘pro ducer-financed’ export subsidies. ‘Consumer only’ and ‘producer’-financed payments require government regulation to allow marketing orders, marketing boards or state trading enterprises (STEs) to operate (Alston and Gray, 1998; Annand and Buckingham, 1998; Dixit and Josling, 1997; Schluep, 1999). We show that domestic price discrimination alone is equivalent to a consumption tax (it is like policy for peanuts in the United States) while price discrimination in international markets alone is a production subsidy (as in the case of the New Zealand Dairy Board).
